Assuming that the economy is in equilibrium at full employment, an increase in t
ID: 1208719 • Letter: A
Question
Assuming that the economy is in equilibrium at full employment, an increase in the money supply will in the long run cause: a proportional increase in the price level and an increase in real GDP. a proportional increase in the price level and a reduction in real GDP. a proportional reduction in the price level and an increase in real GDP. a proportional increase in the price level and no change in real GDP. Ceterus paribus, in the AD/AS/IS/LM model, the short-term effect of an exogenous increase in G is an inward shift of the AD curve an inward shift of the LM curve an outward shift of the AS curve an outward shift of the IS curve Ceterus paribus, in the AD/AS/IS/LM model, the short-term effect of an exogenous increase in the level of autonomous investment (I) is to shift out the LM curve. to shift out the AS curve. to shift out the AD curve. to shift in the IS curve.Explanation / Answer
(29) The correct answer is option (b). A proportional increase in the price level and a reduction in real GDP.
(30) The correct answer is option (b). An inward shift of the LM curve.
(31) The correct answer is option (a). To shift out the LM curve.