Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply,
a. any increase in the money supply can only end up raising the price level
b. any increase in the money supply can only end up lowering the price level
c. any decrease in the money supply can only end up raising the price level
d. changes in the money supply will not affect the price level
e. any increase in the money supply will cause both nominal and real GDP to increase
A
You might also like to view...
An unregulated, single-price monopoly is shown in the figure above. If fixed cost is $20, the monopoly's total costs when it is maximizing its profit will be
A) $30. B) $40. C) $80. D) $140.
Along a consumer's demand curve, price reflects
a. the costs of production b. the dollar value of the total utility from the good c. the dollar value of the marginal utility of each additional unit of the good d. the maximum quantity that could be purchased, given income e. non-rational decision making
The burden of the public debt
a. cannot create inflation b. may create inflation if it is held by the Fed and financed by taxes c. may create inflation if it is held by foreigners d. may create inflation if it is held by the Fed and financed by the creation of deposits in the Treasury's account at the Fed e. may create inflation if it is held by state and local governments and financed by property or sales taxes
A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called
a. a competitive equilibrium. b. an open-market solution. c. a socially-optimal solution. d. a Nash equilibrium.