Which of the following increases the effectiveness of monetary policy from a monetarist perspective?
A. Changing expectations.
B. Unresponsive investment demands.
C. The liquidity trap.
D. The constant velocity of money.
Answer: D
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Suppose the production of cotton causes substantial environmental damage because the pesticides used by cotton farmers often make their way into nearby rivers and streams, and are very harmful to fish and other wildlife. If cotton farmers do not have to pay for the environmental damage caused by the pesticides used to grow cotton, then the market equilibrium price will be ________ and the market equilibrium quantity will be ________.
A. inefficiently low; inefficiently high B. inefficiently low; inefficiently low C. inefficiently high; inefficiently low D. inefficiently high; inefficiently high
An example of the command-and-control approach is public education.
Answer the following statement true (T) or false (F)