Author Question: Using the quantity theory of money, in the long run a 3 percent increase in the quantity of money ... (Read 145 times)

wrbasek0 · **on:** Jun 29, 2018

Using the quantity theory of money, in the long run a 3 percent increase in the quantity of money leads to a 3 percent

A) increase in real GDP.
B) decrease in the price level.
C) increase in the price level.
D) decrease in the real interest rate.
E) increase in the real interest rate.

Question 2

According to the aggregate expenditure model, when faced with unwanted inventory, firms

A) do nothing and wait for equilibrium to be restored.
B) are forced to go out of business.
C) immediately cut prices.
D) decrease production.
E) increase production.