When the Fed Changes the Quantity of Money, There Is

question 235

Multiple Choice

When the Fed changes the quantity of money, there is an immediate effect on

• A) the nominal interest rate.
• B) real GDP.
• C) the price level but not the inflation rate.
• D) the inflation rate but not the price level.
• E) the price level and the inflation rate.

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Definitions:

Worker Productivity

Worker productivity measures the output of goods and services produced per unit of labor input, often considered over a specific period of time.

Capital Required

The total amount of financial resources needed to fund a business’s operations and investments, including starting costs, assets, and working capital.

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain, including water, minerals, forests, and fossil fuels.

Worker Productivity

The measure of the output of goods or services produced by an employee within a given time frame.