Maroeconomics

Real GDP increases in response to

• an increase in the price level

• a decrease in the price level

The money supply

• depends on the inflation rate

• does not depend on the inflation rate

When Y increases, the demand for $

• increases

• decreases

When PL increases, the demand for $

• increases

• decreases

A decrease in PL leads to

• an increase in real GDP

• a decrease in real GDP

When PL increases, interest rates

• increase

• decrease

When the demand for money increases, the interest rate

• increases

• decreases

AD shows the inverse relationship between

• PL and real GDP

• PL and nominal GDP

• PL and inflation

• Inflation and real GDP

• Inflation and nominal GDP

SRAS shows the inverse relationship between

• inflation and unemployment

• inflation and AD

• the PL and AD

• interest rates and unemployment

• interest rates and AD

In the short run, when inflation increases, output

• increases

• decreases