and the real money If the inflation rate is higher than the rate of growth of the nominal money supply, the nominal money supply. supply (M/P) - O a. Stays constant; rises O b. Stays constant; falls O c. Rises; falls O d. Rises; stays constant

During periods of volatile inflation, there is O a. certainty about the price of one good relative to another. O b. less uncertainty C. important information O d. greater uncertainty O e. no information

According to the Keynesian model of macroeconomic equilibrium, a decrease in aggregate demand Select one: O a. will cause the price level to fall substantially. O b. will cause an increase in aggregate supply that will restore full employment. O c. will not cause unemployment. O d. will not cause nominal wages to decline sufficiently to restore full employment.

Consider the short run and the long run and then choose the statement that is correct. O A. The real interest rate is independent of the inflation rate in the long run. B. The real interest rate is dependent on the price level in the long run. C. In the short run, money market equilibrium determines the price level. D. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.