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Aggregate demand-aggregate supply model

Question 1: The demand for money varies

a. directly with both the price level and the level of real GDP
b. inversely with both the price level and the level of real GDP
c. inversely with the price level and directly with the level of real GDP
d. directly with the price level and inversely with the level of real GDP
e. inversely with the level of nominal GDP

Question 2: The opportunity cost of holding money

a. includes bank service charges
b. is the interest foregone on potential interest-earning assets
c. varies inversely with the rate of interest
d. affects relatively few individuals
e. is determined exclusively by the Fed

Question 3: In the aggregate demand-aggregate supply model, a decrease in the money supply will cause in the short run a(n)

a. increase in both the price level and real GDP
b. decrease in both the price level and real GDP
c. increase in real GDP and a decrease in the price level
d. decrease in real GDP and an increase in the price level
e. increase in the price level only

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Macroeconomics: Aggregate demand-aggregate supply model

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Macroeconomics: Aggregate demand-aggregate supply model

Reference No:- TGS01746215

Have a Question? (oR Write a Review)

Recent Questions Asked Macroeconomics

Q : Draw out multiple supply-demand graphs

Q : Full-employment output

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Q : Supply curves to derive the market supply curve

Q : Aggregate demand-aggregate supply model

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Q : Eliminating a recessionary gap in the short run

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Q : How much will the aggregate demand curve shift

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Solution Preview :

Prepared by a verified Expert

Macroeconomics: Aggregate demand-aggregate supply model

Reference No:- TGS01746215

Recent Questions Asked Macroeconomics

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Q : Aggregate demand-aggregate supply model

Q : Average rate of growth in the money supply

Q : Eliminating a recessionary gap in the short run

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Q : How much will the aggregate demand curve shift

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