Answered: In the long run, when the Fed increases…

In the long run, when the Fed increases the quantity of money, the O demand for money decreases. O nominal interest rate falls. O price level rises. O real interest rate rises. O price level falls.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 1CQQ

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Question

In the long run, when the Fed increases the quantity of money, the
O demand for money decreases.
O nominal interest rate falls.
O price level rises.
O real interest rate rises.
O price level falls.

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