If the Federal Reserve Increases the Growth Rate of the Money

question 135

Multiple Choice

If the Federal Reserve increases the growth rate of the money supply,in the long run

• A)inflation is higher and the unemployment rate is lower.
• B)inflation is higher while the unemployment rate is unchanged.
• C)inflation is unchanged while the unemployment rate is lower.
• D)None of the above is correct.

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Definitions:

Marginal Revenue Product Schedule

A chart that shows the additional revenue generated from employing one more unit of a resource.

Marginal Physical Product

The additional output resulting from the use of one more unit of a variable input, keeping all other inputs constant.

Crude Oil

Unprocessed petroleum, a natural fossil fuel consisting primarily of hydrocarbons.

Production of Gasoline

The industrial process of converting crude oil into gasoline, a primary fuel for vehicles, through various refining techniques.