Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes
a. both the short run and the long run.
b. the short run, but not the long run.
c. the long run, but not the short run.
d. neither the long run nor the short run.
b
You might also like to view...
If a country's nominal interest rate is zero, then
A) the country's economy is in a liquidity trap. B) exchange rates with other countries are likely to decline. C) exchange rates with other countries are likely to increase. D) monetary policy is likely to be very effective in stimulating the economy. E) the country's economy has achieved monetary equilibrium.
If adopted by a firm, a labor-augmenting piece of technology is one that would:
A. increase labor demand. B. increase labor supply. C. decrease labor demand. D. decrease labor supply.
Which of the following is a statement of positive economics?
a. The income tax reduces after-tax incomes of the rich b. A reduction in tax rates makes the after-tax distribution of income fairer. c. Tax rates ought to be reduced so that people will work more. d. All of the above are statements of positive economics.
Neo-Keynesians believe that the inverse relationship between rates of unemployment and rates of inflation is causal
Indicate whether the statement is true or false