Multiple choice questions (1 pt. each) 1 If the LRAS curve is vertical, then in the long run, expansionary monetary policy will A) move real GDP and the price level in opposite directions. B) move real GDP and the price level in the same direction. C) only affect the level of real GDP. D) only affect the price level. Neutrality of money suggests A) expansionary monetary policy will lead to permanent rise of real GDP. B) expansionary monetary policy will lead to short-run rise of the total output only. C) expansionary monetary policy will lead to short-run rise of the total output, but not in the long-run. D) Both B) and C) are correct. . If GDP is at full-employment level, then A) money growth rate is = inflation rate. B) money growth rate is 2 times the inflation rate. C) inflation is 50% of money growth rate. D) money growth rate is not =inflation rate. If real GDP grows, then A) inflation rate is higher than money growth rate. B) inflation rate is equal to money growth rate. C) inflation rate is lower than money growth rate. D) more information is needed to find the correct answer. If nominal interest rate = real interest + inflation, then A) this shows how nominal interest is determined, but not real interest rate. B) real interest rate is determined by saving and investment in loanable funds market. C) nominal interest rate is adjusted one-to-one with inflation. D) All of the above A downward sloping short-run Phillips curve suggests A) arise of aggregate demand would raise inflation and unemployment. B) arise of aggregate demand would create a trade-off between inflation and unemployment