In the Aggregate Demand-Aggregate Supply Model, What Will Be the Effects

question 55

Multiple Choice

In the aggregate demand-aggregate supply model, what will be the effects of an increase in the money supply in the short run?  

• A) an increase in the price level, and an increase in real GDP 
• B) a decrease in the price level, and a decrease in real GDP 
• C) an increase in real GDP, and a decrease in the price level 
• D) a decrease in real GDP, and an increase in the price level

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Definitions:

Interpersonal Intelligence

The ability to understand and interact effectively with others, recognizing their moods, intentions, and motivations.

Linguistic Intelligence

One of Howard Gardner's eight multiple intelligences, involving sensitivity to spoken and written language, the ability to learn languages, and the capacity to use language to accomplish certain goals.

Bodily-Kinesthetic Intelligence

The ability to control body movements and handle objects skillfully, as proposed in theories of multiple intelligences.

Intrapersonal Intelligence

The capacity to understand oneself, including one's thoughts and emotions, and use such knowledge effectively in life.