The SRAS Curve Is Upward Sloping,there Is a Liquidity Trap,and

question 149

Multiple Choice

The SRAS curve is upward sloping,there is a liquidity trap,and investment spending is sensitive to changes in the interest rate.According to the monetarist transmission mechanism,if the money supply increases the AD curve __________ and the price level __________.

• A) does not change; does not change
• B) shifts to the left; falls
• C) shifts to the right; rises
• D) does not change; rises
• E) none of the above

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Definitions:

Gross Profit Section

The portion of an income statement that shows revenue minus the cost of goods sold, indicating the profit made from selling goods before other expenses are deducted.

Merchandising Company

A business that purchases finished goods for resale, making a profit on the merchandise sold.

Income Statement

A financial statement showing the revenue, expenses, and profits or losses of a business over a particular period.

Freight-In

Freight-In costs are the shipping charges for receiving goods from suppliers, considered part of the inventory cost and included in the cost of goods sold when the inventory is sold.