An Unexpected Increase in the Supply of Money Will

question 28

Multiple Choice

An unexpected increase in the supply of money will

• A) reduce the real rate of interest and, thereby, trigger an increase in current spending by households and businesses.
• B) reduce aggregate demand and real output in the short run.
• C) increase only the general level of prices in the short run.
• D) lead to a higher rate of unemployment in the short run.

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Definitions:

Directive Style

A leadership approach characterized by giving clear, explicit instructions and expecting compliance.

Excess Zone

A state or area where something exists in quantities or amounts greater than necessary or desired.

Secure And Confident

Describes a state of being wherein an individual feels self-assured and stable in their abilities, decisions, and self-worth.

Innermost Thoughts

The most personal, private, or deeply held beliefs or ideas one may have.