In the Aggregate Demand-Aggregate Supply Model,an Increase in the Money

question 103

Multiple Choice

In the aggregate demand-aggregate supply model,an increase in the money supply will cause in the short run a(n)

• A)increase in both the price level and real GDP
• B)decrease in both the price level and real GDP
• C)increase in real GDP and a decrease in the price level
• D)decrease in real GDP and an increase in the price level
• E)increase in the price level only

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Definitions:

Ring Gear

A large gear that meshes with a smaller gear (pinion), often used in the differential of an automobile.

Planetary Gearset

a compact, high-torque gear system where the central gear (sun gear) drives multiple outer gears (planet gears) which in turn drive a ring gear.

Ring Gear

A large circular gear that engages with a smaller, driving gear or pinion, often found in the differential of a vehicle.

Sun Gear

A central gear around which planetary gears revolve in an automatic transmission or differential, part of a planetary gear set.