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.
d
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Governments often intervene in international trade and impose quotas to
A. shift a nation's production possibilities frontier. B. improve the performance of multinational corporations. C. increase revenues from export subsidies. D. protect domestic industries from foreign competition.
Health insurance companies often charge high premiums because ________
A) they expect to attract high-risk individuals B) they expect to attract risk-averse individuals C) they expect to attract low-income individuals D) they expect to attract risk-neutral individuals
Referring to the above graphic, which of the following statements is FALSE?
A) In panel (a), a competitive situation is shown in which equilibrium is established at the intersection of D and S at point E. B) In panel (a), the equilibrium price is Pe and the equilibrium quantity Qe. C) The price the monopolist charges in panel (b) at Pm is lower than the price that the competitive producer charges. D) The monopolist produces at Qm, and charges a price ofPm, while maximizing profits at the intersection of MC and MR.
As a result of people's habit formation, a tax cut that aims at increasing desired real consumption spending will
A. have no effect on aggregate demand. B. have long-lasting effects on aggregate demand. C. affect only inflation but not unemployment. D. decrease aggregate demand by the same amount of the change in real consumption spending.