Which statement best defines the classical perspective?
a. Aggregate supply determines aggregate demand.
b. Aggregate demand does not matter for anything.
c. Aggregate supply determines real variables such as output.
d. Aggregate demand determines all endogenous variables.
C
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In the circular flow, how are the "value of production," "income," and "expenditures" related?
A) They have no relationship to each other. B) Once tax payments are subtracted at each stage, they are equal. C) Expenditures on GDP equals the value of production which equals income. D) Once net exports of goods and services are subtracted from GDP, all three are equal. E) Value of production always equals income, but expenditures is smaller because households save some of their income and do not spend it.
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve raises the required reserve ratio to 12 percent, then the bank will now have excess reserves of
A) $12,000. B) $0. C) -$2,000. D) -$12,000.
The Fed operating procedures employed between 1979 and 1982 resulted in ________ swings in the federal funds rate and ________ swings in the M1 growth rate
A) increased; increased B) increased; decreased C) decreased; decreased D) decreased; increased
The Dodd-Frank bill led to the financial meltdown of 2008
Indicate whether the statement is true or false