State and explain whether true or false 1) As long as inflation remains roughly constant the movement in the real interest are roughly equal to the movement in the nominal interest 2) In the medium run the interest rate is not affected by money growth 3. The Fisher effect states that in the medium run the nominal interest rate is not affected by money growth 4. Expansionary monetary Policy has no effect on output in the medium run. 5 The rational expectations hypothesis assumes people know the "true model" of the economy and that they use this model to form their past expectations 6. One key conclusion from the real business states that government aggregate demand management polices are useful in curing recession. 7. The growth rate of nominal GDP is always greater than the growth rate of real GDP because changes in nominal GDP reflect both prices and quantity changes.
State and explain whether true or false
1) As long as inflation remains roughly constant the movement in the real interest are roughly equal to the movement in the nominal interest
2) In the medium run the interest rate is not affected by money growth
3. The Fisher effect states that in the medium run the nominal interest rate is not affected by money growth
4. Expansionary
5 The rational expectations hypothesis assumes people know the "true model" of the economy and that they use this model to form their past expectations
6. One key conclusion from the real business states that government aggregate demand management polices are useful in curing recession.
7. The growth rate of nominal
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