The Most Likely Impact of an Unanticipated Increase in the Money

question 192

Multiple Choice

The most likely impact of an unanticipated increase in the money supply is

• A) an increase in the real interest rate, which in turn stimulates investment and GDP.
• B) a decrease in the real interest rate, which in turn stimulates investment and GDP.
• C) a reduction in the general level of prices, which will increase the disposable income of households.
• D) an improvement in technology, which will stimulate both output and employment.

---

Definitions:

Italian Invasion

A reference to various military campaigns by Italy, often highlighted by its involvement in World War II as part of the Axis powers, invading countries like Ethiopia, Albania, and Greece.

Russian Revolution

A period of political and social revolution that led to the downfall of the Russian monarchy and the rise of the Soviet Union (1917–1922).

Herbert Hoover

The 31st President of the United States (1929-1933), known for his handling of the Great Depression, his humanitarian efforts, and his engineering career.

Economy Assessment

The process of analyzing various economic indicators, trends, and data to gauge the overall health and performance of an economy.