Assuming That the Economy Is in the Long Run Equilibrium

question 153

Multiple Choice

Assuming that the economy is in the long run equilibrium at full employment, changes in the money supply affect:

• A) the price level.
• B) employment.
• C) real GDP.
• D) all of the above

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Definitions:

Empirical Claims

Claims that can be true or false depending on the facts.

Prove

To demonstrate the truth or existence of something through evidence or argument.

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.