According to the New Classical economists, with rational expectations, aan increase in the money supply will a. lead only to an increase in prices in both the short run and the long run b. lea to an increase in the equilibrium level of income in the short run but to no change in the equilibrium level of income in the long run. c. lead to a fall in prices but no change in money wages d. lead to a rightward shift in the long run aggregate supply curve.
According to the New Classical economists, with rational expectations, aan increase in the money supply will a. lead only to an increase in prices in both the short run and the long run b. lea to an increase in the equilibrium level of income in the short run but to no change in the equilibrium level of income in the long run. c. lead to a fall in prices but no change in money wages d. lead to a rightward shift in the long run aggregate supply curve.
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
Problem 1CQ
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PQ 16
According to the New Classical economists, with rational expectations, aan increase in the money supply will
a. lead only to an increase in
b. lea to an increase in the equilibrium level of income in the short run but to no change in the equilibrium level of income in the long run.
c. lead to a fall in prices but no change in money wages
d. lead to a rightward shift in the long run
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