Need help with Economic Homework on Chapter 12

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What are the consequences of an increase in the money supply on output and the price level? Do your answer depend on where the economy starts, whether it is in long-run equilibrium or not?

Nov 16th, 2015

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Thank you for the opportunity to help you with your question!

If money in supply increase for a short-run monetary policy will increase prices. Real output and employment will remain the same. Nominal interest rates will increase while real interest rates will stay the same.this is a short run
equilibrium .


Please let me know if you need any clarification. I'm always happy to answer your questions.Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 16th, 2015

Thank you. 


Nov 16th, 2015

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Nov 16th, 2015
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