In the Aggregate Demand-Aggregate Supply Model,an Increase in the Price

question 166

Multiple Choice

In the aggregate demand-aggregate supply model,an increase in the price level will

• A) increase money demand,raise the interest rate,reduce aggregate expenditure,and decrease equilibrium real GDP
• B) decrease money demand,lower the interest rate,increase aggregate expenditure,and increase real GDP
• C) increase the money supply,lower the interest rate,increase aggregate expenditure,and increase real GDP
• D) decrease the money supply,raise the interest rate,reduce aggregate expenditure,and decrease real GDP
• E) not change money supply,money demand or the interest rate,but will shift the aggregate demand curve to the right

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Definitions:

Issued

Pertains to securities or other financial instruments that have been created and offered for sale to investors by a corporation or government entity.

Cash Received

The total amount of cash that an entity collects during a specific period, from various sources including sales, financing, or investments.

Bonds

Long-term debt securities issued by corporations or governments to raise capital, promising to pay the bearer a specified amount of interest over a set period until repayment of the principal.

Face Amount

The value of a financial instrument as stated on the instrument itself.