If the Demand for Money Increases, but the Fed Keeps

question 53

Multiple Choice

If the demand for money increases, but the Fed keeps the money supply the same, then in the short run output will:

• A) fall and in the long run prices will remain unchanged.
• B) remain unchanged and in the long run prices will fall.
• C) remain unchanged and in the long run prices will remain unchanged.
• D) fall and in the long run prices will fall.