Author Question: If the rate of increase in the price level exceeds the rate of increase in nominal GDP, real GDP ... (Read 38 times)

HudsonKB16 · **on:** Jun 30, 2018

If the rate of increase in the price level exceeds the rate of increase in nominal GDP, real GDP declines.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Suppose that the demand and supply of money are initially in equilibrium, and that the demand for money increases. A monetary authority interested in keeping the money supply constant and the interest rate low must:
a. adopt an expansionary monetary policy.
b. adopt a contractionary monetary policy.
c. increase the demand for money.
d. decrease the demand for money.
e. give up pursuing both goals at the same time.