In the monetarist view, if the money supply has been rising too quickly for years, the resulting inflation can be brought under control by slowing money growth. This will
a. quickly reduce inflation with no side effects.
b. quickly reduce inflation with higher unemployment.
c. increase unemployment depending upon how quickly the public changes their expected price level.
d. slowly reduce inflation with higher unemployment.
e. both c and d.
E
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"The price of digital cameras fell because of improvements in production technology. As a result, the demand for non-digital cameras decreased
This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further." Evaluate this statement. A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell. B) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits. C) The statement is false. A decrease in the price of digital cameras would decrease the demand for non-digital cameras, but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease. D) The statement is false because it confuses the law of demand with the law of supply.
When the external balance relationship between government spending and money stock is positive, then the
A) internal balance between them must be negative. B) internal balance between them might be negative or positive. C) internal balance between them must also be positive. D) internal balance between them would not exist.