An Increase in the Money Supply Will Shift the Aggregate

question 140

True/False

An increase in the money supply will shift the aggregate demand curve to the left, resulting in a lower equilibrium price level and a lower equilibrium real GDP.

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Definitions:

Accrual System

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transactions occur.

Expenses

The outflow of money to another person or company to pay for an item or service or for a category of costs.

Beginning Inventory

The valuation of inventory available for transaction at the start of an accounting timeframe.

Cost of Goods Sold

The financial outlays directly connected with creating the products a company sells, which entail materials and labor.