Economist Jones favors a constant-money-growth-rate rule. She says that if the annual money supply growth rate each year is equal to the average annual growth rate in Real GDP, price stability will exist over time. What would economist Smith, who favors activist monetary policy, say to economist Jones?
A) Your analysis assumes that Real GDP is constant over time, and it is not.
B) Your analysis assumes that velocity is constant, and it is not.
C) Your analysis assumes that you can correctly define the money supply.
D) b and c
E) a, b and c
D
You might also like to view...
An unexpected fall in Retail Sales should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
If both supply and demand increase, then the change in equilibrium quantity is indeterminate
a. True b. False
In a centrally-planned economy, economic activity is guided by ______
Fill in the blank(s) with correct word
Risk diversification refers to the process by which:
A. insurance companies change the risk aversion of their clients. B. insurance companies reallocate the likelihood of catastrophes happening. C. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. D. risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual.