Suppose the Economy Currently Has Some Underutilized Resources

question 333

Multiple Choice

Suppose the economy currently has some underutilized resources. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to

• A) increase aggregate demand, increase prices and increase real GDP.
• B) increase aggregate demand, increase prices and decrease real GDP.
• C) increase short-run aggregate supply, decrease in prices and decrease in real GDP.
• D) increase short-run aggregate supply, decrease prices and increase real GDP.

---

Definitions:

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for integrating sensory information and responding accordingly.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue that extends from the brainstem down the vertebral canal, playing a critical role in transmitting neural signals between the brain and the rest of the body.

Brain

The central organ of the human nervous system, located in the skull, responsible for cognitive and bodily functions.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, responsible for connecting the CNS to limbs and organs.