In the Extended Classical Model,an Anticipated Decrease in the Money

question 58

Multiple Choice

In the extended classical model,an anticipated decrease in the money supply would cause output to ________ and the price level to ________ in the short run.

• A)increase; decrease
• B)increase; remain unchanged
• C)remain unchanged; increase
• D)remain unchanged; decrease

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Definitions:

Net Float

The difference between checks written and deposited in the bank not yet cleared or settled.

Ledger Balance

The total balance in a ledger account at a particular point in time, reflecting all transactions up to that moment.

Available Balance

The amount of funds in a checking or savings account that is accessible for immediate use, taking into account any pending transactions.

Net Collection Float

Net collection float refers to the difference in time between when a check is deposited into a bank account and when the funds are available for use, affecting a company's cash flow.