In the Long Run, Changes in the Money Supply Affect

question 65

Multiple Choice

In the long run, changes in the money supply affect only the price level because

• A) the aggregate demand curve is vertical.
• B) the aggregate demand curve is downward sloping.
• C) the long-run aggregate supply curve is vertical.
• D) the long-run aggregate supply curve is upward sloping.
• E) current real GDP is less than the economy's potential GDP.

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Definitions:

Operating Assets

Assets used in the day-to-day operations of a business to generate revenue, excluding investments and non-operational assets.

Net Operating Income

The profit a company generates from its core business operations, excluding taxes and interest.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the net profit from the investment by the initial cost of the investment.

Operating Assets

Assets used in the daily operations of a business to generate income, including equipment, machinery, and buildings.