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:

Resting Potential

Membrane potential of a neuron at rest.

Millivolts

A unit of electric potential or electromotive force equal to one thousandth of a volt, commonly used in measuring electrical potentials in cells and batteries.

Neuron

A specialized cell transmitting nerve impulses; a nerve cell.

Reflexes

Involuntary and nearly instantaneous movements in response to stimuli, as part of the body's protective mechanism.