A country in South America is experiencing high inflation around 15 % and high u

Question

A country in South America is experiencing high inflation around 15 % and high unemployment around 25% According to the AD/AS model which of the following most to the negative aggregate demand shock Positive aggregate demand shock Positive real shock negative real shock The prediction of the quantity theory of money is that An increase in the supply of money will cause a decrease in the price level An increases in the supply of money will cause a proportional increase in the price level An increase in the supply of money will not cause any change in the price level An increase in the price level will cause a decrease in the supply of money

Explanation / Answer

29. D. A Negitive real shock

30. B An increase in the supply of money will cause proportional increase in the Price level.

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