An Unexpected Increase in the Supply of Money Will

question 28

Multiple Choice

An unexpected increase in the supply of money will

• A) reduce the real rate of interest and, thereby, trigger an increase in current spending by households and businesses.
• B) reduce aggregate demand and real output in the short run.
• C) increase only the general level of prices in the short run.
• D) lead to a higher rate of unemployment in the short run.

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Definitions:

Intermolecular Forces

Attractive forces between molecules that affect their physical properties such as boiling point, melting point, and solubility.

Dimethyl Ether

A colorless gas used as an aerosol propellant and a clean fuel, with the formula \(CH_3OCH_3\), also known as methoxymethane.

London Forces

Weak intermolecular forces, also known as dispersion forces, arising from instantaneous dipoles in molecules, influential in nonpolar compounds.

Sodium Chloride

Sodium chloride is a chemical compound also known as table salt, formed from the ionic bonding of sodium and chlorine atoms.