Most economists believe that in the long run, changes in the money supply
a. affect nominal but not real variables. This view that money is ultimately neutral is consistent with classical theory.
b. affect nominal but not real variables. This view that money is ultimately neutral is inconsistent with classical theory.
c. affect real but not nominal variables. This view that money is ultimately neutral is consistent with classical theory.
d. affect real but not nominal variables. This view that money is ultimately neutral is inconsistent with classical theory.
a
You might also like to view...
The production function shows that potential GDP increases when the
A) price level rises. B) price level falls. C) inflation rate falls. D) quantity of labor employed increases. E) the wage rate falls.
Gross private domestic investment or simply business investment spending (I):
a. excludes all investment in the United States by foreign firms. b. includes all capital in the United States. c. includes net additions to the capital stock plus all new corporate stocks and bonds. d. includes business expenditures on new factories, tools, and machinery.
Classical economists believe that an increase in the money supply will lead to:
a. only c and d. b. all of the following. c. an increase in the price level. d. an increase in nominal GDP. e. an increase in real GDP.
In a corporation, the interests of the owners, who seek to maximize profits, may differ from the interests of the managers, who seek prestige and high income. This divergence would be considered:
A. a limited liability problem. B. a free-rider problem. C. a rationing problem. D. a principal-agent problem.