Starting from a Position of Macroeconomic Equilibrium at the Full-Employment

question 67

Multiple Choice

Starting from a position of macroeconomic equilibrium at the full-employment level of real GDP, in the short run, an unanticipated decrease in the money supply will:

• A)raise real interest rates, lower the price level, and reduce real GDP.
• B)raise real interest rates, lower the price level, and increase real GDP.
• C)raise nominal interest rates, raise the price level, and leave real GDP unchanged.
• D)lower real interest rates, raise the price level, and increase real GDP.
• E)lower real interest rate, lower the price level, and increase real GDP.

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Definitions:

Amoeba

Single-celled protist that extends pseudopods to move and to capture prey.

Mantle

Of mollusks, a skirt-like extension of the body wall.

Mollusks

A large phylum of invertebrate animals, including species like snails, clams, and squids, characterized by a soft body and, in many cases, a calcium carbonate shell.

Echinoderms

Invertebrates with a water–vascular system, and hardened plates and spines in the skin or body.