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    Aggregate demand-aggregate supply model

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    The demand for money varies
    a. directly with both the price level and the level of real GDP
    b. inversely with both the price level and the level of real GDP
    c. inversely with the price level and directly with the level of real GDP
    d. directly with the price level and inversely with the level of real GDP
    e. inversely with the level of nominal GDP

    The opportunity cost of holding money
    a. includes bank service charges
    b. is the interest foregone on potential interest-earning assets
    c. varies inversely with the rate of interest
    d. affects relatively few individuals
    e. is determined exclusively by the Fed

    In the aggregate demand-aggregate supply model, a decrease in the money supply will cause in the short run a(n)
    a. increase in both the price level and real GDP
    b. decrease in both the price level and real GDP
    c. increase in real GDP and a decrease in the price level
    d. decrease in real GDP and an increase in the price level
    e. increase in the price level only

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    https://brainmass.com/economics/aggregate-demand-and-supply/aggregate-demand-aggregate-supply-model-131425

    Solution Preview

    The demand for money varies

    c. inversely with the price level and directly with the level of real GDP ...

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    The aggregate demand-aggregate supply model is featured.

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