Answered: Which is of the following is not a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which is of the following is not a belief of monetarists?

a.In the long-run, inflation is always a monetary phenomenon

b.In the short-run, Fiscal policy is a better instrument of stabilization policy than monetary policy

c.In the short-run, velocity is stable

d.In the long-run, a ten percent increase in the money supply results in a ten percent increase in prices

Early Keynesian thinks that money is less important because

a.High interest elasticity of investment

b.People have less incentive to buy bonds

c.Fiscal Policy is more effective as it is determined by the politicians

d.High interest elasticity of money demand

If a country’s policy makers were to continuously use expansionary monetary policy in an attempt to hold unemployment below the natural rate the long-run result would be?

a.All of these answers

b.A decrease in the unemployment rate

c.An increase in the level of output

d.An increase in the rate of inflation

The original Phillips curve illustrates?

a.The positive relationship between output and unemployment

b.The trade-off between output and unemployment

c.The trade-off between inflation and unemployment

d.The positive relationship between inflation and unemployment

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