In the New Classical Model,an Anticipated Increase in the Money

question 26

Multiple Choice

In the new classical model,an anticipated increase in the money stock will cause

• A)the price level and aggregate output to increase.
• B)aggregate output to increase.
• C)the price level to increase.
• D)no effect on either the price level or aggregate output.

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Definitions:

Indifference Curves

Graphical representations used in microeconomics to show combinations of two goods that give a consumer equal satisfaction and utility.

Convex

A shape or curve that bulges outward or is thicker in the middle than at the edges, often used in economic models to describe certain types of preference or utility functions.

Marginal Utility

The increased satisfaction obtained from the consumption of an extra unit of a good or service.

Money Income

The total income received by an individual or household in monetary form from all sources before any taxes.