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

question 75

Multiple Choice

Suppose we are at a long-run equilibrium point in an AD-AS model.Then the money supply increases.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 rises; in the monetarist version,it does not.
• C) In the monetarist version,the price level falls; in the SQTM version,it does not.
• D) In the monetarist version,the Real GDP rises; 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:

Mortality

The incidence of death within a particular population over a specified period of time.

Pretest-posttest Design

A research methodology that measures participants before and after an intervention, allowing for comparisons.

Participant Mortality

In research, the loss of participants from a study before it is completed due to withdrawal, loss to follow-up, or death.

Attrition

The loss of subjects who decide to leave an experiment. See mortality.