From a monetarist perspective, instability in the macro economy arises from
A. the instability of velocity as a policy tool.
B. the use of a monetary rule for monetary policy.
C. secular trends in the economy.
D. changes in monetary policy.
Answer: D
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In the classical model with an open economy, an increase in government purchases can affect a country's exchange rate, causing its imports and exports to change
a. True b. False
Suppose that in a closed economy GDP is equal to 15,000, government purchases are equal to 3,000, consumption equals 10,500, and taxes equal 3,500 . What are private saving and public saving?
a. 1,500 and -500, respectively b. 1,500 and 500, respectively c. 1,000 and -500, respectively d. 1,000 and 500, respectively
An increase in the value of the dollar will ___ agg demand
Fill in the blank(s) with the appropriate word(s).
The balance of payments is
A. the equilibrium result when two countries achieve purchasing power parity. B. an account that records changes in exchange rates between two countries. C. an account that records all economic transactions between a country and all other countries, usually within a year. D. all of the above. E. none of the above.