The Most Likely Impact of an Unanticipated Increase in the Money

question 192

Multiple Choice

The most likely impact of an unanticipated increase in the money supply is

• A) an increase in the real interest rate, which in turn stimulates investment and GDP.
• B) a decrease in the real interest rate, which in turn stimulates investment and GDP.
• C) a reduction in the general level of prices, which will increase the disposable income of households.
• D) an improvement in technology, which will stimulate both output and employment.

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Definitions:

Public Support

The backing or endorsement from the general public or specific societal groups for an idea, policy, or entity.

Management Rights

The legal and implied rights of employers to make decisions regarding the operation of their businesses, including hiring, work assignments, and organizational policies.

Yellow Dog Contracts

Employment agreements where the worker agrees not to join a labor union as a condition of employment, mainly historical and now illegal in the US.

Injunctions

Court orders that compel a party to do or refrain from specific acts, often used in labor disputes to stop certain actions by unions or employers.