If the price level decreases, OA. there is a movement up along a stationary money demand curve. OB. the money demand curve shifts to the right. C. the money demand curve shifts to the left. D. there is a movement down along a stationary money demand curve.

An increase in the money supply creates A. An excess supply of money that is eliminated by rising prices B. An excess supply of money that is eliminated by falling prices C. An excess demand for money that is eliminated by rising prices D. An excess demand for money that is eliminated by falling prices

The supply of money increases when a. the price level falls. b. the interest rate increases. c. the Fed makes open-market purchases. d. money demand increases. Click Save and Submit to save and submit. Click Save All Answers to save all answe MacBook Pra

1.Explain the quantity theory Answer the following questions: of money. Make sure to explain the relationship between money demand, money supply, and quantity of money.

Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. O The size of the labor force O The level of technological knowledge The price level The inflation rate Suppose the economy produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. 132 128 LRAS 124 120 116 Q112 + PRICE LEVEL

The Fed sells treasuries when it wants to reduce the money supply. O True False

Other things the same, continued increases in the money supply lead to a. continued increases in the price level and real GDP. b. continued increases in real GDP but not continued increases in the price level. c. continued increases in the price level but not continued increases in real GDP. d. a one-time permanent increase in both prices and real GDP.

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ans ences rations If in Year 1 the price level was 100 and real GDP was $20 trillion and in Year 2 the price level was 105 and real GDP was $21 billion, then the predominant change that occured in Year 2 was OA a decrease in aggregate demand. B. an increase (shift to the right) in short-run aggregate supply. OC. a decrease (shift to the left) in short-run aggregate supply OD. an increase in aggregate demand.

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