Assume a starting position of macroeconomic equilibrium at the full-employment level of real GDP. In the short run, what effect will a simultaneous increase in the bank rate and an increase in the money demand have given a positively sloped SRAS? a. It will lower real interest rates, raise the price level, and increase real GDP b. It will raise real interest rates, lower the price level, and leave real GDP unchanged c. It will raise nominal interest rates, lower the price level, and leave real GDP unchanged d It will raico real interest rates lower cross out cross out cross out Gross outs
Assume a starting position of macroeconomic equilibrium at the full-employment level of real GDP. In the short run, what effect will a simultaneous increase in the bank rate and an increase in the money demand have given a positively sloped SRAS? a. It will lower real interest rates, raise the price level, and increase real GDP b. It will raise real interest rates, lower the price level, and leave real GDP unchanged c. It will raise nominal interest rates, lower the price level, and leave real GDP unchanged d It will raico real interest rates lower cross out cross out cross out Gross outs
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 8PA
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Please explain why the answer is D
![Assume a starting position of macroeconomic equilibrium at the full-employment level
of real GDP. In the short run, what effect will a simultaneous increase in the bank rate
and an increase in the money demand have given a positively sloped SRAS?
a. It will lower real interest rates, raise
the price level, and increase real
GDP
b. It will raise real interest rates, lower
the price level, and leave real GDP
unchanged
c. It will raise nominal interest rates,
lower the price level, and leave real
GDP unchanged
d. It will raise real interest rates, lower
the price level, and increase
unemployment rate
None of the above
e.
cross out
cross out
cross out
cross out ✔
cross out](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F47cb382d-161e-46f4-854e-779c74c89d43%2F18023ac5-7c32-4adf-afd0-a3695f37667f%2F68uejhj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume a starting position of macroeconomic equilibrium at the full-employment level
of real GDP. In the short run, what effect will a simultaneous increase in the bank rate
and an increase in the money demand have given a positively sloped SRAS?
a. It will lower real interest rates, raise
the price level, and increase real
GDP
b. It will raise real interest rates, lower
the price level, and leave real GDP
unchanged
c. It will raise nominal interest rates,
lower the price level, and leave real
GDP unchanged
d. It will raise real interest rates, lower
the price level, and increase
unemployment rate
None of the above
e.
cross out
cross out
cross out
cross out ✔
cross out
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