Which of the Following Represents the Medium- Run Effect of an Increase

question 61

Multiple Choice

Which of the following represents the medium- run effect of an increase in the price target?

• A) An increase in the price level.
• B) An increase in the real money supply.
• C) An increase in the real wage.
• D) An increase in output.
• E) An increase in the interest rate.

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Definitions:

Deflation

A drop in the overall pricing of goods and services, typically signaling a shrinkage in the money or credit available in the economy.

National Income

The total value of all the goods and services produced by a country’s economy in a specific period, including income from foreign investments.

Gross Investment Expenditures

The total amount spent on new capital assets, before accounting for depreciation.

Government Expenditures

The spending by the government sector on goods and services, including public services and public investment.