An idea from monetarism which has been absorbed into mainstream macroeconomics would be the:
A. Effects of aggregate supply shocks on the level of real output and the price level
B. Importance of the effects of changes in the money supply on the economy
C. Use of discretion rather than rules for guiding economic policy in the economy
D. Influence of real changes, such as in technology and resource availability, on the level of output
B. Importance of the effects of changes in the money supply on the economy
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If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases
When the money market is drawn with the value of money on the vertical axis, as the price level increases which of the following increases?
a. the quantity of money demanded and the quantity of money supplied b. the quantity of money demanded but not the quantity of money supplied c. the quantity of money supplied but not the quantity of money demanded d. neither the quantity of money supplied nor the quantity of money demanded
The perfectly competitive firm cannot influence the market price because
A. its production is too small to affect the market. B. its costs are too high. C. it has market power. D. a few buyers have control over the market price.
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts down and to the left, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will
A. not shift the LR curve. B. shift the IS curve up and to the right. C. shift the LR curve down. D. shift the LR curve up.