Equilibrium GDP in excess of potential GDP eventually will cause the aggregate
A. demand curve to shift outward.
B. supply curve to shift outward.
C. supply curve to shift inward.
D. demand curve to become flatter.
Answer: C
Economics
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Based on the model of the money market, when real GDP increases, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the supply of money increases.
Economics
The proposition that in the long run when real GDP equals potential GDP, an increase in the quantity of money leads to an equal percentage increase in the price level is the called the quantity theory of
A) constant velocity. B) the long run. C) money. D) inflation. E) equal change.
Economics