Question

1. According to classical macroeconomic theory, changes in the money supply affect:

a. real GDP and the price level.

b. real GDP but not the price level.

c. the price level, but not real GDP.

d. neither the price level nor real GDP

 

2. Aggregate demand shifts right if:

a. government purchases increase and shifts left if stock prices rise.

b. government purchases increase and shifts left if stock prices fall.

c. government purchases decrease and shifts left if stock prices rise.

d. government purchases decrease and shifts left if stock prices fall.