Given the Expected Price Level,policies for Reaching Potential GDP Will

question 122

Multiple Choice

Given the expected price level,policies for reaching potential GDP will work best if the money supply is

• A)large,so that prices at potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment
• B)large enough that prices at potential GDP are above expectations and firms can afford to hire workers
• C)small,so that prices at potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment
• D)small,so that prices at potential GDP are above expectations and firms can afford to hire the workers
• E)exactly the size that makes prices equal to the prices people expected to prevail

---

Definitions:

Nitrobenzene

An organic compound constituted by a benzene ring bonded to a nitro group, used in the production of anilines.

Activator

A substance that increases the rate of a chemical reaction without being consumed, often by lowering the activation energy.

Major Organic Product

The primary product resulting from the majority pathway of an organic reaction.

Benzene

An aromatic hydrocarbon with a ring of six carbon atoms bonded together in a planar hexagonal ring with alternating single and double bonds.