According to the monetarist view, the
a. IS schedule is quite flat; hence, reflecting a high interest elasticity of aggregate demand.
b. IS schedule is quite steep; hence, reflecting a high interest elasticity of aggregate demand.
c. LM schedule is quite flat; hence, reflecting a high interest elasticity of money demand.
d. IS schedule is almost vertical; hence, reflecting a very low interest elasticity of money demand.
A
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Assuming that the demand and supply of a good both decreased by the same amount, the new equilibrium would represent:
a. an increase in price and an increase in quantity exchanged. b. no change in price and an increase in quantity exchanged. c. a decrease in price and a decrease in quantity exchanged. d. no change in price, and decrease in quantity exchanged.
Which of the following about inflation is true?
a. High and variable rates of inflation will be easy for decision makers to forecast accurately. b. Unanticipated inflation is an increase in the general level of prices that was not expected by most decision makers. c. In contrast with unanticipated inflation, anticipated inflation implies that the increase in the general level of prices was expected by borrowers but not lenders. d. Inflation will increase the prices of goods and services that households purchase but not the wage rates of workers.