According to New Classical Economists, If the Fed Increases the Money

question 104

Multiple Choice

According to new classical economists, if the Fed increases the money supply after it announces it, output ________ and the price level ________.

• A) increases; remains constant
• B) remains constant; increases
• C) remains constant; remains constant
• D) increases; increase

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Definitions:

Nineteenth Century

The period from 1801 to 1900, characterized by industrialization, colonial expansion, and significant social, economic, and political changes.

Railroads

Transportation systems using trains to move goods and passengers along tracks, playing a key role in economic development by facilitating trade and movement.

Price War

A collapse of prices when tacit collusion breaks down.

Equilibrium Price

The price point where the supply of items meets the demand for the same items exactly.