Suppose that all the factors that cause economic growth remain constant and the economy is at full employment. What are the effects of an expansionary monetary. policy, in the short run and in the long run? (Hint: You can draw the SRAS-LRAS-AD graphs to answer this question.) Select one: a. In the short run output decreases, in the long run output increases back to its potential level and prices decrease. b. In the short run output increases, in the long run output decreases back to its potential level and prices increase. O c. Output and prices increase both in the short run and in the long run. d. In the short run output increases, in the long run output stabilizes above its potential level and prices do not change. e. In the short run output does not change, in the long run output and prices increase.

Suppose that all the factors that cause economic growth remain constant and the economy is at full employment. What are the effects of an expansionary monetary. policy, in the short run and in the long run? (Hint: You can draw the SRAS-LRAS-AD graphs to answer this question.) Select one: a. In the short run output decreases, in the long run output increases back to its potential level and prices decrease. b. In the short run output increases, in the long run output decreases back to its potential level and prices increase. O c. Output and prices increase both in the short run and in the long run. d. In the short run output increases, in the long run output stabilizes above its potential level and prices do not change. e. In the short run output does not change, in the long run output and prices increase.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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