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QUESTION
1 In the short run, increases in the money supply increase the level of output because __________.
1 In the short run, increases in the money supply increase the level of output because __________.
prices and wages are sticky
prices and wages are flexible
interest rates are sticky
demand is fixed
2 A necessary condition for the classical model to work is that __________.
wages and prices are fully flexible
prices, but not wages, are fully flexible
wages and prices are not fully flexible
wages, but not prices, are fully flexible
