In the Long Run,if the Money Supply Increases

question 119

Multiple Choice

In the long run,if the money supply increases:

• A)most of the resulting rise in nominal GDP will be a result of increases in the exchange rate.
• B)most of the resulting rise in nominal GDP will be a result of increases in the price level.
• C)most of the resulting rise in real GDP will be a result of increases in the price level.
• D)most of the resulting rise in real GDP will be a result of increases in the interest rate.
• E)most of the resulting rise in real GDP will be a result of increases in aggregate expenditure.

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Definitions:

Regulation

A rule or directive made and maintained by an authority.

Taxation

The process by which governments charge fees on individuals and corporations to fund public services and infrastructure.

Market Inefficiencies

Situations where resources are not distributed optimally in a market, often leading to a loss in economic or social value.

Pollution Permits

Licenses issued by government authorities that allow holders to emit a specific amount of pollutants over a set period, intending to control and reduce environmental damage.