In the Medium Run, If Government Purchases Are Increased and Nominal

question 20

Multiple Choice

In the medium run, if government purchases are increased and nominal money supply is decreased, we can expect that

• A)aggregate demand and prices will increase but interest rates will not change
• B)aggregate demand, prices, and the interest rate will all decrease
• C)aggregate demand and interest rates will decrease but prices will increase
• D)the AD-curve will shift to the right and the AS-curve will shift to the left
• E)the interest rate will increase while aggregate demand and prices may increase, decrease, or remain the same

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Definitions:

Edward Hopper

A prominent American realist painter and printmaker, known for his depictions of solitude in modern American life.

Nighthawks

A famous painting by Edward Hopper that depicts people sitting in a downtown diner late at night.

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A complex and usually unpleasant emotional response to isolation or lack of companionship.

Regionalist

Refers to an artist or writer that emphasizes the themes, characteristics, and culture of a specific geographic area or region in their work.