Looking at the Macroeconomic Statistics for Friedmanland,you Discover That at the Beginning

question 36

Multiple Choice

Looking at the macroeconomic statistics for Friedmanland,you discover that at the beginning of the year,the national money supply was equal to $400 million and by the end of the year it was equal to $420 million.You also found out that the inflation rate in Friedmanland was 7%.In this case,you would expect the LM curve to

• A)shift up as the real money supply falls.
• B)shift up as the real money supply rises.
• C)shift down as the real money supply falls.
• D)shift down as the real money supply rises.

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Definitions:

Operating Expense

Expenses incurred during the normal operations of a business, such as salaries, rent, and utilities, excluding cost of goods sold.

Outgoing Merchandise

Outgoing merchandise refers to inventory that has been sold and is in the process of being shipped to the customer.

Multiple-Step

The multiple-step income statement is a detailed financial report that separates operating revenue and expenses from non-operating ones to highlight core business activities.

Single-Step

A method of preparing the income statement where all revenues are summarized together and all expenses are summarized together, with a single step to determine net income.