Federal reserve uses expansionary monetary policy

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Reference no: EM131101535

If the Federal Reserve uses expansionary monetary policy, then:

there is a negative short-run effect on real GDP but prices remain unchanged in the long run.

there is a positive short-run effect on the price level but the aggregate price level remains unchanged in the long run.

there is a positive long-run effect on real GDP but GDP remains unchanged at its potential level in the short run.

there is a positive short-run effect on real GDP but GDP remains equal to potential GDP in the long run.

Reference no: EM131101535

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