The proposition that changes in the money supply have no long-run effect on real variables is known as the ________
A) classical dichotomy
B) quantity theory of money
C) neutrality of money
D) Fisher effect
E) none of the above
C
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The Fed primarily uses the reserve requirement to control the money supply
a. True b. False Indicate whether the statement is true or false
Economists who believe that the economy has a strong self-correcting mechanism argued that, after September 11, 2001, the economy needed
a. a quick and expansionary fiscal policy stimulus. b. a quick and expansionary monetary stimulus. c. only a short time to return to equilibrium full employment. d. President Bush to propose a large budget stimulus package.
When a country allows trade and becomes an importer of a good,
a. everyone in the country benefits. b. the gains of the winners exceed the losses of the losers. c. the losses of the losers exceed the gains of the winners. d. everyone in the country loses.
When interest rates decrease, banks will normally
A. increase lending, but decrease deposits and the money supply. B. increase lending, deposits, and the money supply. C. decrease lending, but increase deposits and the money supply. D. decrease lending, deposits, and the money supply.