In the Short Run,a Permanent Increase in the Domestic Money

question 11

Multiple Choice

In the short run,a permanent increase in the domestic money supply causes

• A)a greater upward shift in the DD curve than that caused by an equal,but transitory,increase.
• B)a greater downward shift in the AA curve than that caused by an equal,but transitory,increase.
• C)an smaller upward shift in the AA curve than that caused by an equal,but transitory,increase.
• D)a smaller downward shift in the AA curve than that caused by an equal,but transitory,increase.
• E)a greater upward shift in the AA curve than that caused by an equal,but transitory,increase.

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Definitions:

Two Firms

Refers to a market scenario dominated by a duopoly, where two companies control the majority of the market share.

Industry

A sector of the economy made up of manufacturing, production, or services in a similar area of business, contributing to the production of goods or services.

Collusion

Collusion is a non-competitive, secret, and sometimes illegal agreement between competitors to manipulate market conditions by coordinating prices, production, or marketing strategies.

Oligopoly

An economic scenario in which a few large companies control the majority of the industry, resulting in minimal competition and possibly increased prices for buyers.