The Monetarist transmission mechanism through which monetary policy affects the price level, real GDP, and employment depends on the:
A. indirect impact of changes on the interest rate.
B. indirect impact of changes on profit expectations.
C. direct impact of changes in fiscal policy on aggregate demand.
D. direct impact of changes in the money supply on aggregate demand.
Answer: D
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The part of consumption that does not depend upon the level of disposable income is
A) autonomous consumption. B) savings. C) average propensity to consume. D) saving.
If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should
A) engage in free trade. B) protect the capital-intensive product. C) protect the land-intensive product. D) protect the labor-intensive product. E) discontinue all international trade.
Funding for the operations of the Board of Governors of the Federal Reserve is derived from
A) taxes collected from commercial banks. B) the governments of the states in which the district banks operate. C) appropriations from the United States Congress. D) earnings of the Federal Reserve district banks.
Limited liability is a benefit available only to
A) sole proprietorships. B) partnerships. C) corporations. D) All of the above.