If the Short-Run Aggregate Supply Curve Is Horizontal, And, If

question 73

Multiple Choice

If the short-run aggregate supply curve is horizontal, and, if each member of the general public chooses to hold a larger fraction of his or her income as cash balances, then:

• A) output and employment will increase in the short run.
• B) output and employment will decrease in the short run.
• C) prices will increase in the short run.
• D) prices will decrease in the short run.

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