According to the Aggregate Demand and Aggregate Supply Model, in the Long

question 66

Multiple Choice

According to the aggregate demand and aggregate supply model, in the long run what is the impact of an increase in the money supply?

• A) It lowers both the price level and real GDP.
• B) It increases GDP, but it does not change the price level.
• C) It increases the price level, but it does not change real GDP.
• D) It increases both the price level and real GDP.

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Definitions:

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Total Revenue

The sum total of financial gains a company secures from its commercial transactions or service provisions during a certain interval.

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared to buy at a distinct price point, during a specific time frame.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.