46. According to your texthook, throagh what chanel does monetary pollcy influen

Question

46. According to your texthook, throagh what chanel does monetary pollcy influence the level of real GDP and the price level? A) If the money supply increases, interest rates fall, causing Investment to rise, which causes Aggregate Demand to rise, resulting in an increase Real GDP and an increase in the Price Level. If the money supply increases, interest rates fall, causing Investment to fall, which causes Aggregate Demand to fall, resulting in a decrease Real GDP and an increase in the Price Level. Ifthe money supply increases, Aggregate Supply will rise, resulting in an increase Real GDP and a decrease in the Price Level. If the money supply increases, Aggregate Supply will rise, causing interest rates to fall, which causes an increase in Aggregate Demand, resulting in an increase in Real GDP and a decrease in the Price Level. B) C) D) What type(s) of unemployment may be present when the unemployment rate is equal to its natural rate? A) None B) Structural and Frictional C) Frictional, Cyclical, and Structural D) Cyclical 47. Use the following to answer question 48 Exhibit 30-4 Price level Panel (b) LRAS SRAS Ps AD Real GDP 48. Refer to Exhibit 30-4. If policymakers want to use discretionary fiscal policy to eliminate the output gap, which of the following actions would be appropriate? A) decrease wages. B) increase transfer payments such as unemployment compensation C) raise taxes. D) increase government purchases.

Explanation / Answer

Answer.)

Q46.) C.) If the money supply increases, aggregate supply will rise resulting in an increase in Real GDP and a decrease in the price level .

Q47.) B.) Structural and frictional

Natural rate of unemployment is the sum of structural unemployment and frictional unemployment.

Q48.) C.) Raise taxes.

Raise taxes shifts aggregate demand curve leftward to eliminate the inflationary gap.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.