Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. The level of technological knowledge The inflation rate The price level The size of the labor force

Question

Dawson Rivera

Business

24 April, 20:12

Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. The level of technological knowledge The inflation rate The price level The size of the labor force

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Answers (1)

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Charlie Avery · Answer 1

The price level

Explanation:

Fed is responsible for increasing and decreasing the money supply in the economy. There are various factors which fed consider before changing the money supply. If fed doubles the growth rate of the quantity of money in the economy, it will change the price level in the long-run. Increase in the money supply means people have money to buy commodities which will increase the price level in the future.