An increase in government spending will result in an increase in the price level and an increase in real GDP in the long run

Dollar bills in the modern economy serve as money because

A) they can be redeemed for gold by the Federal Reserve. B) they are backed by the gold stored in Fort Knox. C) they have value as a commodity independent of their use as money. D) people have confidence that others will accept them as money.

A relatively steep aggregate demand curve indicates that

A) velocity is relatively constant. B) the economy is near full employment. C) inflation is relatively high. D) spending is insensitive to changes in the price level.