Which of these does not hold true if an economy is simultaneously in long-run and short-run equilibrium?
a. The actual price level equals the expected price level.
b. Aggregate quantity supplied equals potential output.
c. Aggregate quantity demanded equals potential output.
d. Aggregate quantity supplied equals aggregate quantity demanded.
e. Aggregate demand curve is horizontal at the potential output level.
Question 2
As a result of an expansionary monetary policy:
a. both aggregate expenditure and aggregate demand increase.
b. both aggregate expenditure and aggregate demand decrease.
c. aggregate expenditure increases and aggregate demand decreases.
d. aggregate expenditure decreases and aggregate demand increases.
e. aggregate expenditure remains unchanged; aggregate demand increases.
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