If the Money Supply Increases When There Is Much Idle

question 36

Multiple Choice

If the money supply increases when there is much idle capacity in the economy,

• A)most of the resulting rise in nominal GDP will be a result of price increases
• B)most of the resulting rise in nominal GDP will be a result of increases in real output
• C)most of the resulting rise in real GDP will be a result of increases in the price level
• D)most of the resulting rise in real GDP will be a result of increases in the interest rate
• E)only nominal GDP will change; real GDP will be unaffected

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Definitions:

Globalization

The process of transformation of local or regional phenomena into global ones, involving the interconnectedness of economies, societies, and cultures across the world.

Global North

Wealthy, industrialized countries in the northern hemisphere (previously referred to as the First World).

Global South

Term used to describe countries and regions located primarily in the southern hemisphere, often focusing on those with developing or underdeveloped economies, highlighting global inequities.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.