Which of the Following Implies That an Increase in the Money

question 93

Multiple Choice

Which of the following implies that an increase in the money supply growth rate permanently changes the unemployment rate?

• A)both the long-run aggregate supply curve and the long-run Phillips curve
• B)the long-run aggregate supply curve,but not the long-run Phillips curve
• C)the long-run Phillips curve,but not the long-run aggregate supply curve
• D)neither the long-run Phillips curve nor the long-run aggregate supply curve

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Definitions:

Capital Investment

The spending of money on resources intended to benefit a business in the long term, such as by acquiring assets or improving infrastructure.

Inflationary Premium

The portion of interest rates or returns that compensates investors for the anticipated erosion of purchasing power due to inflation.

Money Rate

Often referring to the interest rates in financial markets; the cost of borrowing money.

Time Preference

The inclination of individuals to prefer goods and services in the present rather than in the future.