Suppose We Are at a Long-Run Equilibrium Point in an AD-AS

question 18

Multiple Choice

Suppose we are at a long-run equilibrium point in an AD-AS model.Then the money supply falls.In the short run,is there any difference between what happens in the simple quantity theory of money (SQTM) version and the monetarist version of the model?

• A) There is no difference.
• B) In the SQTM version,the price level falls; in the monetarist version,it does not.
• C) In the monetarist version,Real GDP falls; in the SQTM version,it does not.
• D) In the monetarist version,the price level falls; in the SQTM version,it does not.
• E) In the SQTM version,Real GDP falls; in the monetarist version,it does not.

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Definitions:

ERP

Event-Related Potential; a measured brain response that is the direct result of a specific sensory, cognitive, or motor event.

Non-Invasive

Procedures or techniques that do not require entering the body or breaking the skin, often used in medical treatments and diagnostics to reduce risk and discomfort.

Expensive

A term used to describe an item, service, or commodity that requires a significant amount of money to purchase or maintain.

Place Cells

Place cells are neurons in the hippocampus that become active when an animal is in or is thinking about a specific location, playing a key role in spatial memory and navigation.