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.

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Definitions:

Ambiguous Stimuli

Objects, words, or situations that lack clarity or have multiple interpretations.

Free Association

Psychodynamic therapy method allowing spontaneous, uncensored verbal expression to uncover unconscious thoughts.

Psychoanalysis

A therapeutic approach and theory of psychopathology, originated by Sigmund Freud, which emphasizes the exploration of unconscious conflicts.

Couch

A piece of furniture designed for sitting or lying on, often used symbolically to represent psychoanalysis or psychotherapy sessions.