In the Aggregate Demand-Aggregate Supply Model in the Short Run,an

question 39

Multiple Choice

In the aggregate demand-aggregate supply model in the short run,an increase in the money supply will lead to a(n) :

• A)increase in both the price level and real GDP.
• B)decrease in both the price level and real GDP.
• C)increase in real GDP and a decrease in the price level.
• D)decrease in real GDP and an increase in the price level.
• E)increase in the price level only.

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Definitions:

Industry Contraction

A phase in the business cycle where there is a decrease in economic activity within a particular industry, often characterized by reduced output and employment.

Upward Sloping

A graphical representation indicating an increase in a variable as another variable increases, often seen in supply curves.

Resource Prices

The costs associated with acquiring the inputs required for production, such as labor, materials, and capital.

Industry Production

Is the total output of goods and services produced by an industry over a specific period.