Assume Monetary Equilibrium Exists-That Is, the Desired and the Actual

question 167

Multiple Choice

Assume monetary equilibrium exists-that is, the desired and the actual supply of money are equal -when nominal GDP equals $480 billion and the money supply is $160 billion. According to a strict
Monetarist view, an increase in the money supply of $10 billion will increase the nominal GDP by

• A) $30 billion.
• B) $25 billion.
• C) $20 billion.
• D) $10 billion.

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Definitions:

Foundry

A workshop or factory for casting metal, where molten metal is poured into molds to create various shapes.

Manhole Covers

Heavy removable plates placed over the openings of manholes to prevent accidental falls into them and to block unauthorized access to the municipal services below.

Productivity

A measure of efficiency that calculates the amount of output produced per unit of input.

Service Sector

Refers to the segment of the economy that provides services rather than producing goods, including industries like retail, healthcare, and finance.