In the Short Run in the Keynesian Model,an Increase in the Domestic

question 47

Multiple Choice

In the short run in the Keynesian model,an increase in the domestic money supply would cause domestic output to ________ and the domestic real interest rate to ________.

• A)rise; rise
• B)fall; rise
• C)rise; fall
• D)fall; fall

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Definitions:

Price/Earnings Ratio

A measure used in finance that compares the current price of a company's stock to its per-share earnings, indicating the market's expectations of the company's future earnings growth.

Inflation Rate

The speed at which the average cost of products and services increases, reducing the buying power.

Risk Averse

A tendency to prefer options that have fewer risks and more certain outcomes.