In the Long Run, an Increase in the Quantity of Money

question 248

Multiple Choice

In the long run, an increase in the quantity of money:

• A) increases real output.
• B) increases prices but not long-run output.
• C) increases real interest rates.
• D) has no effect on the economy.

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Definitions:

Sales Tax

A tax imposed by government on sales of goods and services, typically computed as a percentage of the sale price.

Delivery Charge

A fee charged by a seller to cover the cost of delivering goods to a buyer's location.

Valuation Rate

The interest rate or discount rate used in determining the present value of future cash flows or in appraising the value of an asset.

Market Value

The current price at which an asset or service can be bought or sold in a competitive marketplace.