Author Question: The level of real GDP in the long run is A) potential GDP. B) determined solely by aggregate ... (Read 107 times)

nummyann · **on:** Jun 29, 2018

The level of real GDP in the long run is

A) potential GDP.
B) determined solely by aggregate demand.
C) affected by changes in the price level.
D) the same as the level of nominal GDP in the long run.

Question 2

Suppose you withdraw 1,000 from your savings account and put it in your checking account. Briefly explain how this will affect M1 and M2.

What will be an ideal response?

Athena23 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

M2 will not change and M1 will rise by 1,000. Going from a savings account to checking account would raise M1, but both are part of M2, so M2 would not change.