In the Long Run, What Effect Does an Increase in the Money

question 77

Multiple Choice

In the long run, what effect does an increase in the money supply have on prices and unemployment?

• A) It leaves prices and unemployment unchanged.
• B) It lowers prices and unemployment.
• C) It raises prices and leaves unemployment unchanged.
• D) It leaves prices unchanged and reduces unemployment.

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Definitions:

Debit Balance

An accounting balance where the sum of debits exceeds the sum of credits, typical for assets and expenses.

Sales Tax

A tax paid to a governing body for the sales of certain goods and services usually collected by the retailer at the point of purchase.

Account Receivable

A financial record of the money owed to a business by its customers for goods or services delivered on credit.

Perpetual Inventory System

An inventory management system that updates item records continuously as transactions occur, providing a real-time view of inventory levels.