An Initial Increase in Aggregate Demand That Is NOT Followed

question 12

Multiple Choice

An initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in a long-run equilibrium with

• A) a higher price level but the same real GDP.
• B) a higher price level and a higher level of real GDP.
• C) the same price level and a lower level of real GDP.
• D) None of the above answers are correct.

---

Definitions:

Account Balances

The total amounts in financial accounts, reflecting the sum of all transactions like deposits and withdrawals, at any given time.

Exchange Rates

The valuation of one currency in terms of its equivalent in another currency.

U.S. Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, within the United States.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.