Planned investment plus unintended increases in inventories equals:

Suppose the Fed buys government securities from a commercial bank. Why is there a multiplier effect on the quantity of money?

What will be an ideal response?

If inflation were reduced, then it is

a. likely that real incomes would rise more rapidly and labor markets would be more flexible. b. likely that real incomes would rise more rapidly but unlikely that labor markets would be more flexible. c. likely that labor markets would be more flexible but unlikely that real incomes would rise more rapidly. d. unlikely that real incomes would rise more rapidly and unlikely that labor markets would be more flexible.