Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of

Explain how the interest rate effect can increase aggregate demand

What will be an ideal response?

A core belief of modern macroeconomics is that in the long run,

A) a change in money growth will affect the level of output, but not its composition. B) a change in money growth will affect the composition of output, but not its level. C) output can deviate permanently from its natural level. D) a change in fiscal policy will not affect the composition of output. E) greater saving will result in greater output.