If the economy is at full employment and the Fed increases the quantity of money, _______. A.

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If the economy is at full employment and the Fed increases the quantity of money, _______.

A. Aggregate demand increases, a recessionary gap appears, and the money wage rate starts to rise

B. Aggregate supply increases, the price level starts to fall, and an expansion begins

C. Aggregate demand increases, an inflationary gap appears, and the money wage rate starts to rise

D. Potential GDP and aggregate supply increase together and the price level does not change

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Foundations of Macroeconomics

ISBN: 978-0134492001

8th edition

Authors: Robin Bade, Michael Parkin

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Question Posted: May 21, 2018 07:52 AM

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If the economy is at full employment and the Fed increases the quantity of money, _______. A.

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C An increase in the quantity ...View the full answer

Foundations of Macroeconomics

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