Question

In the short run, expansionary monetary policy ___________ real gross domestic product (GDP), ___________ unemployment, and ___________ the price level.
a.raises; lowers; raises
b.raises; raises; raises
c.lowers; lowers; raises
d.lowers; lowers; lowers
e.raises; lowers; lowers

Answer 1

Answer:

a.raises; lowers; raises

Explanation:

An expansionary monetary policy is usually undertaken by the Central bank to increase money supply.

When money supply is increased, output increases and real GDP rises.

The rise in money supply which causes output to increase would lead to an increase in demand for Labour. This would reduce unemployment.

Because of rise of money supply, the supply of money in the economy would rise and the price level would rise.

I hope my answer helps you.