In the Long Run, a 3 Per Cent Increase in the Quantity

question 60

Multiple Choice

In the long run, a 3 per cent increase in the quantity of money leads to a 3 per cent

• A) increase in the price level.
• B) increase in the real interest rate.
• C) increase in real GDP.
• D) decrease in the real interest rate.
• E) decrease in the price level.

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to buy at a given price over a specified period of time.

Price

The expenditure needed to secure a product, service, or piece of property.

Price-discriminating Monopolist

A monopolist that sells the same product at different prices to different groups of consumers, usually to maximize profits by capturing consumer surplus.

Market

A place or mechanism through which buyers and sellers interact to trade goods, services, or assets, facilitating the determination of prices and the exchange of ownership.