If the Money Supply Increases When There Is Much Idle

question 36

Multiple Choice

If the money supply increases when there is much idle capacity in the economy,

• A)most of the resulting rise in nominal GDP will be a result of price increases
• B)most of the resulting rise in nominal GDP will be a result of increases in real output
• C)most of the resulting rise in real GDP will be a result of increases in the price level
• D)most of the resulting rise in real GDP will be a result of increases in the interest rate
• E)only nominal GDP will change; real GDP will be unaffected