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.

3. If the economy is at the natural rate of unemployment with the level of real GDP at potential output, what would expansionary fiscal or monetary policy do to the economy? How would the economy be affected in the short run and long run?

What is the effect of a rise in the money wage rate when the economy is at potential GDP? A rise in the money wage rate when the economy is at potential GDP A. does not change potential GDP but increases real GDP along the AS curve. B. decreases potential GDP because the full-employment quantity of labor decreases C. does not change aggregate supply but decreases production D. decreases aggregate supply because a rise in the money wage rate increases costs, so firms employ fewer workers Click to select your answer.

The​ short-run effect of an increase in the money supply is to Part 2 A. increase the price level only. B. increase both real GDP and the price level. C. increase nominal GDP but decrease the price level. D. increase real GDP only.

In the short run, a rise in the federal funds rate shifts the a. AD curve leftward. b. SAS curve leftward. c. LAS curve leftward. d. None of these because a decrease in the quantity of money does not shift a curve.

Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price, then we would expect that in the short run, a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same. 20. Suppose the economy is in long-run equilibrium. If there is a sharp decline in the stock market combined with a temporary increase in oil price. then we would expect that in the short run, real GDP will rise and the price level might rise, fall, or stay the same. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the…

In the medium run, if government purchases are increased and nominal money supply is decreased, we can expect that   a. the interest rate will increase while aggregate demand and prices may increase, decrease, or remain the same   b. aggregate demand and prices will increase but interest rates will not change   c. aggregate demand and interest rates will decrease but prices will increase   d. aggregate demand, prices, and the interest rate will all decrease   e. the AD-curve will shift to the right and the AS-curve will shift to the left

All else equal, suppose the interest rate rise from 3% to 3.5%. What will happen in the supply of money? a. Shifts to the right. b. Shifts to the left. c. An upward movement along the supply curve. d. An downward movement along the supply curve. e. The supply will remain unchanged.

The Aggregate Demand line slopes down for a few reasons, one of which is ... Group of answer choices a. When consumers feel prices going up the purchase more b. When price levels go up, it reduces the purchasing power of savings c. When price levels go up, it increases the purchasing power of savings d. When suppliers feel prices going up the supply more

If the velocity of money is assumed to be constant in the short run, the quantity theory of money contends that a decrease in the money supply will lead to a proportional ____   a. Increase in unemployment rate b. Increase in nominal interest rate c. Increase in price level d. Decrease in nominal output