If the Fed Responds to an Initial Increase in Aggregate

question 314

Multiple Choice

If the Fed responds to an initial increase in aggregate demand by increasing the quantity of money,

• A) there will be no inflationary gap.
• B) real GDP will begin to decrease more rapidly than if the quantity of money had remained constant.
• C) money wages will fall to reduce the unemployment.
• D) there is the risk of continued inflation.

---

Definitions:

Overpowering

Exerting control or influence over someone or something to an excessive degree, often overwhelming or subduing.

Conflict Resolution

The process of resolving disputes or disagreements between parties in a peaceful and effective manner.

Facilitating Conflict

The act of managing disagreements in a way that encourages constructive communication and resolution among involved parties.

Prosocial Skills

Prosocial skills involve behaviors that are intended to benefit others, including acts of kindness, empathy, cooperation, and social problem-solving.