Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality.
B) money is a leading, procyclical variable.
C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money.
D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
C
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When there is no Ricardo-Barro effect, a government budget surplus ________ the real interest rate because the ________ loanable funds increases
A) lowers; supply of B) lowers; demand for C) raises; supply of D) raises; demand for E) None of the above answers is correct because the real interest rate does not change.
How is the sacrifice ratio measured? How big is the sacrifice ratio in the United States? In other countries? What problems are there in measuring the sacrifice ratio?
What will be an ideal response?