Elijah asked in Social ScienceEconomics · 8 years ago

An economics question? (multiple choice)?

1. The interest rate falls. The Aggregate Supply/Aggregate Demand model predicts that in the short run this will:

A. Increase the price level and decrease real GDP

B. Decrease the price level and decrease real GDP

C. Only Increase the price level

D. Increase the price level and increase real GDP

2. The interest rate falls. The Aggregate Supply/Aggregate Demand model predicts that in the long run this will:

A. Increase the price level and decrease real GDP

B. Decrease the price level and decrease real GDP

C. Only Increase the price level

D. Increase the price level and increase real GDP

2 Answers

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  • 8 years ago
    Favorite Answer

    easy question

    1 D

    2 A

    its more interesting to talk about nominal wages in short run and long run as these

    are more affected. Cos output anyways returns back to original level leaving prices higher

    how many times does this happen in an economy :P

    Source(s): mind
  • Anonymous
    6 years ago

    problematic step query into yahoo it can assist

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