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:

Patenting Innovations

The act of securing legal protection for new inventions or processes to prevent unauthorized use.

Tsunami

A succession of significant waves in the ocean, often the result of submarine earthquakes, volcanic explosions, or terrain collapses.

Sumatra

A large Indonesian island in Southeast Asia, known for its diverse ecosystems, including mountains, rainforests, and vast wildlife.

Gigantic Waves

Extremely large and powerful water waves, often associated with storms or seismic activity.