A recessionary gap exists when the equilibrium level of GDP

Are jobs the key to economic progress and the achievement of high income levels?

a. Yes, as long as people are working, real income levels will be high. b. Yes, when full employment is present, income levels will be at their maximum. c. No, it is not just employment, but employment that expands production of goods and services that others value highly relative to cost. d. Uncertain, additional employment will increase real income only when the general level of prices is unchanged.

The simple quantity theory of money predicts that if

A) the money supply rises by $200, then GDP falls by $200. B) GDP rises by $400, then the money supply rises by $400. C) the money supply rises by 10 percent, then the price level rises by 10 percent. D) the money supply falls by $300, then GDP rises by $300.