An expansion of the money supply, ceteris paribus, will
a. raise interest rates
b. reduce investment demand
c. contract aggregate demand
d. lower prices
e. increase investment in the economy
E
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Which of the following components are used to calculate GDP?
a. tons as a unit of measurement; intermediate goods; new products b. dollars as a unit of measurement; final services; new products c. millimeters as a unit of measurement; intermediate goods; used products d. dollars as a unit of measurement; final services; used products
When the level of aggregate production is less than the potential output level, this implies that unemployment is high. Jobs are scarce and workers are abundant, which causes nominal wages to fall over time. The SRAS will shift to the left, moving the short run level of aggregate production closer to the potential output level.
Indicate whether the statement is true or false.