According to the New Classical School of Thought, a Continually

question 28

Multiple Choice

According to the new classical school of thought, a continually increasing money supply causes ________.

• A) the aggregate demand curve to shift continually to the right, and the price level to increase continually
• B) the aggregate supply curve to shift continually to the right, and the price level to increase continually
• C) the long-run aggregate supply curve to shift continually to the right, and the price level to increase continually
• D) B and C only

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage of the loan amount.

Coupon Rate

The annual interest rate paid by bond issuers to its bondholders, usually expressed as a percentage of the bond's face value.

Semi-Annually

Occurring twice a year, typically every six months.