Using the aggregate supply drawn under the monetarist view, what should happen to the equilibrium price level and quantity of output if the Fed buys bonds?
A. Equilibrium price level and equilibrium output should both increase.
B. Equilibrium price level should increase, and equilibrium output should decrease.
C. Equilibrium price level should decrease, and equilibrium output should increase.
D. Equilibrium price level should increase and equilibrium output should stay constant.
D. Equilibrium price level should increase and equilibrium output should stay constant.
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Which of the following predicts that there can be no sustained rise in real GDP per person above the subsistence level?
A) classical growth theory B) neoclassical growth theory C) new growth theory D) None of the above because all predict that there will be a sustained rise above the subsistence level.
A reduction in which of the following variables will cause a reduction in the user cost of capital?
A) rt B) ?t C) ?et D) all of the above E) none of the above