If a Central Bank Increases the Money Supply in Response

question 35

Multiple Choice

If a central bank increases the money supply in response to an adverse supply shock,then which of the following quantities moves closer to its pre-shock value as a result?

• A)both the price level and output
• B)the price level but not output
• C)output but not the price level
• D)neither output nor the price level

---

Definitions:

Thyroxine (T4) Level

A measurement of the concentration of thyroxine, a hormone produced by the thyroid gland, in the bloodstream.

Thyroid Gland

An endocrine gland located in the neck, producing hormones that regulate metabolism, energy generation, and overall growth and development.

Parathyroid

Small glands located behind the thyroid which produce parathyroid hormone, involved in calcium regulation.

Vertebra Prominens

The most prominent vertebra in the neck, easily felt through the skin, typically the seventh cervical vertebra (C7).