According to monetarists, such as Milton Friedman ________
A) the central bank should have discretionary authority to respond to economic problems that develop over the course of the business cycle
B) the Taylor rule should effectively address the problem of inflation
C) an increase in government spending has substantially the same effects as an unanticipated increase in the money supply on domestic interest rates
D) the money supply should grow at a constant rate regardless of the state of the economy
D
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In 2003, government spending as a percentage of GDP was approximately
a. 75 percent b. 50 percent c. 33 percent d. 20 percent e. 10 percent
If we observe that Jamie’s budget constraint has moved outward, then we know for certain that
a. the price of one or both of the goods must have decreased. b. she will be indifferent between goods X and Y. c. she can reach a higher indifference curve. d. her income must have increased.