The Intended Effect of an Expansionary Monetary Policy Is That

question 148

Multiple Choice

The intended effect of an expansionary monetary policy is that aggregate demand:

• A) increases,raising real GDP growth only in the long run.
• B) increases,raising inflation and real GDP growth in both the short run and the long run.
• C) increases,raising real GDP growth in the short run,but only inflation rises in the long run.
• D) remains unchanged while the economy's long-run potential growth rate increases.

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Definitions:

Annuity

A financial instrument designed to distribute a steady series of disbursements to a person, commonly utilized as a source of income during retirement.

Amortize

To amortize is to gradually reduce or write off the cost or value of an intangible asset through systematic charges to income over its estimated useful life.

Compounded Monthly

A method of calculating interest where the interest earned or paid is added to the principal so that the next interest calculation includes prior interest.

End of Year Annuity

A series of equal payments made at the end of consecutive periods over a fixed length of time.