Suppose the central bank increases the money supply in an economy ...

[kfurse]

Suppose the central bank increases the money supply in an economy unexpectedly during a year. If the current inflation rate in this country is 3.4 percent, then according to new classical economists, the expected inflation rate for the following year would be:
 a. 3.4 percent.
  b. less than 3.4 percent.
  c. 2.4 percent, because people form their expectations adaptively.
  d. around 6.8 percent.
  e. greater than 3.4 percent.

Question 2

An increase in demand will increase total revenue:
 a. Always.
 b. Only if supply is relatively inelastic.
  c. Only if supply is relatively elastic.
  d. Only if supply is unit elastic.

[Shshxj]

Answer to Question 1

e

Answer to Question 2

a

[kfurse]

Thanks for the timely response, appreciate it

[shailee]

TYSM