According to the policy irrelevance proposition, monetary policy can affect real variables
A) in the short run only, and then only if the policy was fully anticipated.
B) in both the short run and the long run.
C) in the short run only, and then only if the policy was unanticipated.
D) in the long run only.
C
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A country is said to be experiencing deflation when
A) prices of most goods and services are rising over time. B) prices of most goods and services are falling over time. C) total output is rising over time. D) total output is falling over time.
Which of the following statements is correct?
a. In both the Keynesian and classical systems, aggregate demand is an important determinant of output and employment b. In classical and monetarist models, money is the primary factor determining changes in aggregate demand. c. Aggregate demand in the Keynesian model is determined entirely by the quantity of money, whereas in the classical model, money is one of several factors determining aggregate demand d. None of the above