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-If the Economy's Aggregate Demand and Supply Curves Are AD₁

Question 67

Multiple Choice

  -If the economy's aggregate demand and supply curves are AD₁ and AS₁,an increase in the money supply will: A)  lower total real output and raise the price level as aggregate supply shifts from AS₁ to AS₀. B)  lower total real output and leave the price level unchanged because AD₁ will shift to AD₀. C)  raise total real output but not the price level, for aggregate supply will shift from AS₁ to AS₂. D)  raise both total real output and the price level as aggregate demand shifts from AD₁ to AD₂. E)  raise the price level but leave total real output unchanged, as aggregate demand shifts from AD₁ to AD₂ and aggregate supply shifts from AS₁ to AS₀.
-If the economy's aggregate demand and supply curves are AD₁ and AS₁,an increase in the money supply will:


A) lower total real output and raise the price level as aggregate supply shifts from AS₁ to AS₀.
B) lower total real output and leave the price level unchanged because AD₁ will shift to AD₀.
C) raise total real output but not the price level, for aggregate supply will shift from AS₁ to AS₂.
D) raise both total real output and the price level as aggregate demand shifts from AD₁ to AD₂.
E) raise the price level but leave total real output unchanged, as aggregate demand shifts from AD₁ to AD₂ and aggregate supply shifts from AS₁ to AS₀.

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