If the Economy Is at Potential Output and the Fed

question 109

Multiple Choice

If the economy is at potential output and the Fed increases the money supply, in the long run the price level will likely:

• A) fluctuate randomly.
• B) remain the same.
• C) decrease.
• D) increase.

---

Definitions:

REM Deprivation

The condition of being deprived of Rapid Eye Movement sleep, a phase of sleep important for processing emotional experiences and retaining memories.

Mental Illness

A broad category of conditions affecting a person's thinking, emotional state, and behavior that disrupts their ability to work or carry out other daily activities.

Visual Impairments

A range of conditions that involve partial or total loss of sight which cannot be corrected by standard glasses or contact lenses.

Sleepwalk

The act of walking or performing complex behaviors while in a state of sleep, also known as somnambulism.