Monetarists believe:
a. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy.
b. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works.
c. since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise.
d. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity.
e. the cause-and-effect relationship hypothesized by Keynesians will not work because investment does not respond to changes in interest rates.
c
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Refer to Figure 12-17. Which of the following statements is true?
A) The current market price is $3 but the firm will be able to increase the price in the future. B) The current market price is $3 but the price will fall in the long run as new firms enter the market. C) The current market price is $3 but the price will increase in the future as the market demand increases. D) The current market price is $3 but the price will fall in the long run as a result of a decrease in demand.
Of the sources of external funds for nonfinancial businesses in the United States, corporate bonds and commercial paper account for approximately ________ of the total
A) 5% B) 10% C) 32% D) 50%
Cartel pricing refers to the output and price choice of a cartel. This choice most closely resembles that of a:
a. b or d b. godfather oligopoly. c. duopoly. d. monopoly. e. more competitive industry.
Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by $20 billion. 2 . Taxes fall by $20 billion. Assume that the marginal propensity to consume is 0.8