The relationship between money supply, output, and the overall level of prices is illustrated by the:
A. measure of real output.
B. aggregate price level.
C. neutrality of money.
D. classical theory of inflation.
Answer: D
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Explain the income effect and the substitution effects of a price change for a normal good
What will be an ideal response?
Monetizing the debt is undesirable given its impact on ________
A) investment B) nominal income C) tariff rates D) prices
Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)?
a. Less production of capital goods than what is needed to replace worn-out capital. b. Greater production of capital goods than what is needed to replace worn-out capital. c. Capital goods are produced at rate needed exactly to replace worn-out capital. d. More production of consumption goods that replace worn-out capital.
A person setting up automatic deductions through her employer so a portion of her pay goes into a "Christmas account" is an example of:
A. status quo bias. B. positive framing. C. the endowment effect. D. a commitment device.