According to the Monetarists, After an Initial Increase in Aggregate

question 8

Multiple Choice

According to the monetarists, after an initial increase in aggregate demand,

• A) short-run aggregate supply curve will tend to shift leftward, reflecting the effect of higher wages adjusting in the long run.
• B) short-run aggregate supply curve will tend to shift leftward, reflecting the effect of lower wages adjusting in the long run.
• C) aggregate demand curve will tend to shift rightward, reflecting the effect of income adjusting in the long run.
• D) aggregate demand curve will tend to shift lower, reflecting the effect of price level adjusting in the long run.

---

Definitions:

Net Income

What a company ultimately earns in profit after removing the costs of taxes and expenses from its revenue.

Stockholders' Equity

The ownership interest of shareholders in a corporation, measured as the company's total assets minus its total liabilities.

Dividends In Arrears

Outstanding dividends on cumulative preference shares that have not been paid by the company in the time stipulated.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and entitlement to dividends.