Classical economists
a. argued that the money supply determined aggregate demand.
b. regarded monetary policy as unimportant since the quantity of money does not determine the price level.
c. believed that the quantity of money influences interest rates and real wages.
d. believed that prices would increase more than proportionate to an increase in the money supply.
A
You might also like to view...
The tax cuts in 1981 and 1982 did not lead to growth in GDP as did the tax cuts in 1964. One reason for this difference was that
A) the 1981-82 tax cuts concentrated on personal tax cuts, but the 1964 cuts were for both personal and corporate taxpayers. B) the saving rate increased in 1981-82, but it decreased in 1964. C) expansionary monetary policy accompanied the 1964 tax cuts, but the 1981-82 cuts were accompanied by restrictive monetary policy. D) tax indexation was built into the 1981-82 tax-cut program, but in 1964 there was no indexation.
Which of the following statements best describes the neoclassical perspective?
a. The level of potential GDP is determined by long-term productivity growth, and the economy typically will return to full employment after a change in aggregate demand. b. The level of potential GDP is determined by short-term productivity growth, and the economy typically will return to full employment after a change in aggregate demand. c. The level of potential GDP is determined by full employment ,and the long-term productivity growth will return after a change in aggregate demand. d. The level of potential GDP is determined by full employment, and short-term productivity growth will return after a change in aggregate demand.
A 2009 article in The Economist noted that
a. recent research has allowed economists to estimate the values of fiscal multipliers with a great deal of precision. b. research on multipliers indicates that multipliers for permanent tax cuts tend to be smaller than multipliers for temporary tax cuts. c. most of the evidence on multipliers for government spending is based on changes in military expenditures. d. All of the above are correct.
Which of the following describes how U.S. exports and imports have changed since 1960?
a. Both exports and imports have risen sharply. b. Exports have risen, but imports have fallen. c. Exports have fallen, but imports have risen. d. Both exports and imports have fallen slightly.