In the Monetarist Version of the AD-AS Framework,starting from Long-Run

question 40

Multiple Choice

In the monetarist version of the AD-AS framework,starting from long-run equilibrium,an increase in the money supply produces

• A) no change in Real GDP in the short run or the long run.
• B) a rise in Real GDP in both the short run and the long run.
• C) a rise in Real GDP in the short run,but not in the long run.
• D) a rise in Real GDP in the long run,but not in the short run.

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Definitions:

Expected Value

A calculated average of all possible values for a random variable, weighted by their probabilities of occurrence.

Receptive

Being open and willing to accept new ideas, suggestions, or changes.

Make-Or-Buy

Decision process in businesses to determine whether they should produce a good/service internally or purchase it from an external supplier.