Suppose That the Fed Implements Expansionary Monetary Policy That Raises

question 133

Multiple Choice

Suppose that the Fed implements expansionary monetary policy that raises aggregate demand,but individuals incorrectly anticipate the policy measure (bias downward) .According to new classical theory,in the short run the price level would ____________ and Real GDP would ______________.In the long run,new classical theory would predict that the price level would ___________compared to its original long-run equilibrium level and that Real GDP would ____________.

• A) rise; decline; rise; remain unchanged
• B) rise; rise; rise; remain unchanged
• C) rise; decline; remain unchanged; rise
• D) fall; rise; remain unchanged; rise

---

Definitions:

Mode of Transportation Pricing

The cost structure associated with different modes of transport, factoring in distance, speed, volume, and type of goods.

Vehicle

In marketing, a vehicle refers to the medium or channel used to transmit an advertising message to its intended audience, such as television, radio, or online platforms.

Single-Zone Pricing

A pricing strategy where a seller charges the same price for a product or service, regardless of where the buyer is located.

FOB Origin Pricing

A term used in shipping indicating that the buyer takes responsibility for shipping costs and risk of loss from the seller’s location.