Author Question: The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause ... (Read 132 times)

B · **on:** Jun 30, 2018

The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
e. fall, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.

Question 2

The presence of discouraged workers may cause:
a. the employment rate to be overstated.
b. the employment rate to be understated.
c. the unemployment rate to be overstated.
d. the unemployment rate to be understated.
e. GDP to be too large.