Suppose That from an Initial AD/SAS/LAS Intersection,the Money Supply Grows

question 33

Multiple Choice

Suppose that from an initial AD/SAS/LAS intersection,the money supply grows by ten percent.At the same time,the nominal wage rises by six percent.As a result,output will be ________ the natural GDP,with a price level ________.

• A)below,10 percent lower
• B)below,10 percent higher
• C)below,between 6 and 10 percent lower
• D)above,that is unchanged
• E)above,between 6 and 10 percent higher

---

Definitions:

Standard Deviation

A measurement that quantifies the variation or dispersion of a set of numerical data points.

Annual Rate

The annual rate refers to the interest or return on an investment over a one-year period, expressed as a percentage of the investment's initial value.

Speculative Bubble

A situation in financial markets where asset prices are driven by exuberant market behavior, greatly exceeding the asset's intrinsic value.

Fundamental Value

Fundamental value is the intrinsic worth of an asset, determined through financial analysis of its underlying factors including earnings, dividends, and growth prospects.