Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality.
B) money is a leading, procyclical variable.
C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money.
D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
C
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New money is created in the U.S. economy by
A) increased federal government expenditures. B) banks that create checkable deposits. C) the U.S. Treasury. D) U.S. Department of Mint. E) the U.S. Congress.
Which is most likely to cause a temporary spurt in the growth of GDP that cannot be maintained in the long run?
a. An unanticipated increase in aggregate demand. b. An anticipated increase in aggregate demand. c. An increase in long run aggregate supply (LRAS). d. An increase in wage rates
When an economy experiences deflation, consumption will:
A. decrease, because people will want to wait for prices to drop before spending. B. decrease, because people will lose value in their savings. C. increase, because people will lose value in their savings. D. increase, because people will want to wait for prices to drop before spending.
Over long periods of time, the growth rates of actual and potential GDP have been
A. diverging. B. similar. C. declining together. D. usually far apart.