Author Question: If the price level in the current year is much higher than the expected price level, _____. a. ... (Read 126 times)

tnt_battle · **on:** Jun 30, 2018

If the price level in the current year is much higher than the expected price level, _____.
a. firms will increase production beyond the economy's potential level
b. the unemployment rate will increase
c. firms will decrease production below the economy's potential level
d. the short-run aggregate supply curve will become steeper
e. the unemployment rate will fall to zero

Question 2

The money demand curve slopes:
a. downward because the cost of holding money decreases as the interest rate decreases.
b. downward because the cost of holding money increases as the interest rate decreases.
c. upward because people demand more money as real GDP increases.
d. upward because people demand more money as real GDP decreases.
e. downward because people demand more money as the price level decreases.