In the Long Run, a Sustained Increase in Money Supply

question 145

Multiple Choice

In the long run, a sustained increase in money supply growth relative to the growth rate of potential real output will most likely:

• A)​cause the nominal interest rate to fall.
• B)​cause the real interest rate to fall.
• C)​reduce the natural rate of unemployment.
• D)​none of the above

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Definitions:

Frequency

The number of occurrences of a repeating event per unit of time, often applied to waves or vibrations.

Amplitude

The greatest distance of a swing or fluctuation, measured from the point of balance.

Place Theory of Pitch

A theory that suggests the perception of pitch relates to the location of maximum vibration on the basilar membrane inside the cochlea.

Basilar Membrane

A structural element within the cochlea of the inner ear that plays a critical role in sound perception by vibrating in response to sound waves, thus contributing to the mechanical processes that convert sound into neural signals.