Author Question: When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand ... (Read 54 times)

Tazate · **on:** Jun 30, 2018

When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand because:
a. real interest rates will fall, stimulating business investment and consumer purchases.
b. the dollar will depreciate on the foreign exchange market, leading to an increase in net exports.
c. lower interest rates will tend to increase asset prices, which increases wealth and thereby stimulates current consumption.
d. of all the above reasons.

Question 2

Per capita real GDP is:
a. equivalent to the real GDP level.
b. a measure of the value of output produced and available to an average person.
c. higher in developing countries than in developed countries.
d. a measure of an economy's income distribution.
e. a measure of the GDP per country.