In the Monetarist Version of the AD-AS Framework,starting from Long-Run

question 40

Multiple Choice

In the monetarist version of the AD-AS framework,starting from long-run equilibrium,an increase in the money supply produces

• A) no change in Real GDP in the short run or the long run.
• B) a rise in Real GDP in both the short run and the long run.
• C) a rise in Real GDP in the short run,but not in the long run.
• D) a rise in Real GDP in the long run,but not in the short run.

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Definitions:

Market For Soda

The commercial space in which various types and brands of soda (sugary, carbonated beverages) are bought, sold, and competed over.

Surplus

The situation in which the quantity supplied of a product exceeds the quantity demanded at the existing price.

Binding Rent-Control

A type of rent regulation where the set price ceilings are below the market equilibrium rent, leading to shortages and reduced quality of rental housing.

Transaction Costs

Expenses incurred in the process of making an economic exchange, including search, information, bargaining, decision, policing, and enforcement costs.