Monetarists believe:
A. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy.
B. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works.
C. since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise.
D. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity.
Answer: C
You might also like to view...
Which of the following best describes supply-side economics?
A) Education affects the incentive to work, save, and invest and, therefore, aggregate supply. B) Tax rates, particularly marginal tax rates, affect the incentive to work, save, and invest and, therefore, aggregate supply. C) Labor productivity affects aggregate supply. D) Education affects labor productivity which affects aggregate supply.
Which of the following is not true of the statistical discrepancy in the balance of payments?
a. It is residual. b. It is a measure of net error in the balance of payments data. c. It is necessary because some transactions go unreported. d. An excess of credits in all other accounts must be offset by equivalent debits in the statistical discrepancy account. e. A difference between credits and debits is taken care of by changes in the official reserve transaction account.
It is illegal in the United States for firms to pay different employees different wages for doing the same job
a. True b. False Indicate whether the statement is true or false
The theory of consumer choice illustrates that people face tradeoffs, which is one of the Ten Principles of Economics
a. True b. False Indicate whether the statement is true or false