In the as/ad model, an expansionary monetary policy has the greatest effect on the price level when it

a. increases both nominal and real income

b. increases real income but not nominal income

c. increases nominal income but not real income

d. doesn't increase real or nominal income

Question

Donna Chavez

Business

4 October, 10:50

In the as/ad model, an expansionary monetary policy has the greatest effect on the price level when it

a. increases both nominal and real income

b. increases real income but not nominal income

c. increases nominal income but not real income

d. doesn't increase real or nominal income

+5

Answers (1)

Know the Answer?

Ally Dixon · Answer 1

The answer that would best complete the given statement above would be option B. In the as/ad model, an expansionary monetary policy has the greatest effect on the price level when it increases real income but not nominal income. Hope this answers your question.

In the as/ad model, an expansionary monetary policy has the greatest effect on the price level when ita. increases both nominal and real incomeb. increases real income but not nominal incomec. increases nominal income but not real incomed. doesn't increase real or nominal income

In the as/ad model, an expansionary monetary policy has the greatest effect on the price level when it

a. increases both nominal and real income

b. increases real income but not nominal income

c. increases nominal income but not real income

d. doesn't increase real or nominal income