TIGUINE

/_(0)^(-3)

\ Refer to Figure 28-5. This economy begins in equilibrium with

M_(S)^(0),M_(D)^(0)

and real GDP equal\ to potential GDP (with

AD^(0)

and

AD^(1)

). Now suppose there is an increase in the money supply\ to

$540

billion. In the long run, after all adjustments have taken place, the money supply is\ the interest rate is\ , the price level is\ A)

$540

billion;

4%;102

;

$795

billion\ B)

$540

billion;

2%;102

;

$805

billion\ C)

$540

billion;

4%;104

;

$800

billion\ D)

$500

billion;

4%;104;$800

billion\ E)

$500

billion;

2%;100

;

$800

billion

Review Questions for the Final Examination Econ 209, Winter 2019 HGUKE 285 15) Refer to Figure 28-5. This economy begins in equilibrium with MS0,MD0 and real GDP equal 15) to potential GDP (with AD0 and AD1 ). Now suppose there is an increase in the money supply to $540 billion. In the long run, after all adjustments have taken place, the money supply is the in terest rate is the price level is , and real GDP is A) $540 billion; 4%;102;$795 billion B) $540 billion; 2%;102;$805 billion C) $540 billion; 4%;104;$800 billion D) $500 billion; 4%;104;$800 billion E) $500 billion; 2%;100;$800 billion