If the Economy Is at Potential Output and the Fed

question 183

True/False

If the economy is at potential output and the Fed increases the money supply, in the short run real GDP will likely remain the same.

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Definitions:

Follow-Up

The action of maintaining contact with someone or continuing an activity to ensure completion or further progress.

Not-for-Profit Organizations

Organizations that operate for purposes other than making a profit, often focused on social, educational, or charitable activities.

General Corporations

A legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations have legal rights, liabilities, and can enter contracts.

Capital Item

Long-lasting goods that a firm acquires and uses in the production of other goods or services that have a life span extending beyond one year.