In the Extended Classical Model,an Unanticipated Increase in the Money

question 69

Multiple Choice

In the extended classical model,an unanticipated increase in the money supply would cause output to ________ and the price level to ________ in the short run.

• A)increase;increase
• B)increase;not change
• C)not change;increase
• D)decrease;increase

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Definitions:

SRAS Curve

The Short-Run Aggregate Supply curve, which shows the relationship between the price levels in an economy and the quantity of goods and services that producers are willing to supply in the short term.

Passive Approach

An investment strategy or management style where decisions are minimal in an effort to mimic the returns of a particular market or index.

Aggregate Demand

The holistic demand for goods and services throughout an economy, estimated at a predetermined price level over a particular period.

Active Approach

A proactive strategy in management or policy-making that involves taking deliberate actions to achieve specific goals.