In the long run, money demand and money supply determine
a. the price level and the real interest rate.
b. the price level but not the real interest rate.
c. the real interest rate but not the price level.
d. neither the price level nor the real interest rate.
b
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The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.
Answer the following statement true (T) or false (F)
International trade shocks
A. are of greater concern to large industrialized countries than to developing countries that rely on exporting a few primary commodities. B. can be avoided by moderate use of tariffs and non-tariff barriers. C. include changes in a country's total exports that result from changes in foreign consumer tastes. D. have no impact on the countries under fixed exchange-rate regimes.