Classical Economists Believe That an Increase in the Money Supply

question 102

Multiple Choice

Classical economists believe that an increase in the money supply will lead to:

• A) only c and d.
• B) all of the following.
• C) an increase in the price level.
• D) an increase in nominal GDP.
• E) an increase in real GDP.

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Definitions:

Activated Automatically

Processes or responses that occur without conscious control or effort.

Reduced Efficiency

A decline in the effectiveness or productivity of a process, system, or mechanism, often resulting in lower output or increased waste.

Bystander Effects

Phenomena in which individuals are less likely to offer help to a victim when other people are present.

Diffusion Of Responsibility

A psychological phenomenon where individuals are less likely to take action or feel a sense of responsibility in the presence of a large group of people.