According to the Aggregate Demand and Aggregate Supply Model, in the Long

question 66

Multiple Choice

According to the aggregate demand and aggregate supply model, in the long run what is the impact of an increase in the money supply?

• A) It lowers both the price level and real GDP.
• B) It increases GDP, but it does not change the price level.
• C) It increases the price level, but it does not change real GDP.
• D) It increases both the price level and real GDP.

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Definitions:

Generating Revenues

Generating revenues involves engaging in activities that bring income to a business, such as selling goods or providing services.

Cost

The total amount of money spent on the production, acquisition, or maintenance of goods and services.

Direct Labor Cost

The total expense that a company incurs for employees who directly work on manufacturing products or performing services, including wages, benefits, and payroll taxes.

Automotive Repair Shop

A business establishment dedicated to repairing and maintaining vehicles, including cars and trucks.