42. According to economists, money is NOT A) a medium of exchange B) a store of
ID: 1128118 • Letter: 4
Question
42. According to economists, money is NOT A) a medium of exchange B) a store of value C) a unit of account D) capital ol though what channel does monetary policy influence the level of hich 43. According to your text real GDP and the price level? the money supply increases, interest rates fall, causing Investment to rise, w causes Aggregate Demand to rise, r inerease in the Price Leveresulting in an increase Real GDP and an B) 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. e money supply increases, Aggregate Supply will rise, resulting in an increase Real GDP and a decrease in the Price Level. C) If th money supply increases, Aggregate Supply willrise, causing interest rates to causes an increase in Aggregate Demand, resulting in an increase in D) If the fall, which Real GDP and a decrease in the Price Level. Use the following to answer question 44: Figure: Money Market I Interest rate, r Equilibrium nterestww.. rate M Quantity of money MHExplanation / Answer
Ans)
42.
D) Capital
According to the economists, money is anything which can be used as medium of exchange, a store of value, standard of deferred payment and a unit of account.
43.
A)if the money supply increases, interests rate falls, causing investment to rise, which causes Aggregate demand to rise, resulting in an increase real GDP and an increase in the price level
An increase in the money supply leads to a fall in the average interest rates, because of this borrowing becomes cheaper, investment increases, because of which aggregate demand increase(AD=C+I+G+NX) and shifts to the right thereby increasing the output and increasing the price level.
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