From an Initial Equilibrium in the Basic Model That Includes

question 313

Multiple Choice

From an initial equilibrium in the basic model that includes the AD and LRAS curves only, an increase in money supply growth will cause inflation:

• A) and real growth to increase.
• B) to increase and real growth to decrease.
• C) to increase and real growth to remain unchanged.
• D) and real growth to remain unchanged.

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Definitions:

Percent Rate

The percentage that indicates the rate of change or the rate applied to a specific financial calculation.

Base

(1) The quantity that is multiplied by itself in a power. (2) The initial amount to which a percent change is applied.

Accurate

Free from errors or mistakes; precise.

Cent

A small unit of currency, constituting one-one-hundredth of a primary currency unit, used in numerous countries worldwide.