Using the Aggregate Supply and Demand Model, Assume the Economy

question 143

Multiple Choice

Using the aggregate supply and demand model, assume the economy is operating along the intermediate portion of the aggregate supply curve. An increase in the money supply will increase the price level and:

• A) lower both the interest rate and real GDP.
• B) raise both the interest rate and real GDP.
• C) lower the interest rate and raise GDP.
• D) raise the interest rate and lower real GDP.

---

Definitions:

Tetanus

A bacterial infection characterized by muscle spasms, caused by the bacterium Clostridium tetani.

Sarcolemma

The muscle cell plasma membrane.

Kohlberg's Theory

A theory of moral development proposed by Lawrence Kohlberg, suggesting that moral reasoning develops in six stages throughout a person's life.

Moral Development

The process through which individuals acquire the standards of right and wrong that guide their behavior within society.