According to the Monetarists, After an Initial Increase in Aggregate

question 14

Multiple Choice

According to the monetarists, after an initial increase in aggregate demand, the ____ curve Will tend to shift ______, reflecting the effect of ______ in adjusting to the long run.

• A)short-run aggregate supply; leftward; higher wages
• B)short-run aggregate supply; leftward; lower wages
• C)aggregate demand; rightward; income
• D)aggregate demand; lower; price level

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Definitions:

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price level.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market equilibrium price.

Rent Control

Governmental regulation of the amount landlords can charge for residential housing, intended to make housing more affordable.

Equilibrium Level

A condition where the supply and demand in the market are equal, leading to steady prices and amounts.