In the Long Run, Changes in the Money Supply Affect

question 65

Multiple Choice

In the long run, changes in the money supply affect only the price level because

• A) the aggregate demand curve is vertical.
• B) the aggregate demand curve is downward sloping.
• C) the long-run aggregate supply curve is vertical.
• D) the long-run aggregate supply curve is upward sloping.
• E) current real GDP is less than the economy's potential GDP.

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Definitions:

Market Value

The present rate at which a service or asset is available for purchase or sale on the open market.

Straight Line

A depreciation method where an asset loses value evenly across its useful life.

Tax Rate

The percentage at which an individual or corporation is taxed.

Market Value

The current price at which an asset or service can be bought or sold in the market.