A Doubling of the Nominal Money Supply Would Create a New

question 3

Multiple Choice

A doubling of the nominal money supply would create a new AD curve at double the vertical position of the original AD curve because

• A)at each price level there is a decrease in autonomous spending.
• B)each output level requires the same real money supply as in the original situation.
• C)the rise in money supply causes increased expectation of further price increases and investment declines.
• D)the rise in the money supply causes an excess supply of money and generates rising interest rates.

---

Definitions:

Direct Beneficiary

An individual or entity that is explicitly intended by the parties involved to benefit from a contract or agreement.

Credit Instrument

A document that evidences a debt and the promise of repayment, such as bonds, notes, or mortgages.

Transferor's Warranties

Guarantees made by a seller (transferor) to a buyer about the condition, legality, and ownership status of the goods or property being sold.

Presenter's Warranties

Guarantees made by the presenter of a negotiable instrument, such as a check, regarding its legitimacy and their authority to present it.