In the classical system, the quantity of money
a. determines the price level and, for a given real income, the level of nominal income.
b. does not affect the equilibrium values of output, employment, and the interest rate.
c. affects the equilibrium values of output, employment, and the interest rate.
d. Both a and b
e. Both a and c
D
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According to the above table, in the base period (Year 1), the price index is
A) 100. B) 213.3. C) 46.9. D) 180.
Growth often requires:
A. concurrent improvements in many aspects of the economy. B. governments to invest in one facet of the economy at a time, starting with education. C. governments to invest in one facet of the economy at a time, starting with basic infrastructure. D. governments to invest in one facet of the economy at a time, starting with leapfrog technology.
How much is induced consumption when disposable income is $3 trillion?
A. 0
B. $1 trillion
C. $1.5 trillion
D. $2.5 trillion
Refer to the above data. If this economy were closed to international trade, then the equilibrium GDP and the multiplier would be:
A. $500 billion and 5
B. $500 billion and 4
C. $600 billion and 5
D. $600 billion and 4