Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply,
a. any increase in the money supply can only end up raising the price level
b. any increase in the money supply can only end up lowering the price level
c. any decrease in the money supply can only end up raising the price level
d. changes in the money supply will not affect the price level
e. any increase in the money supply will cause both nominal and real GDP to increase
A
You might also like to view...
In reality, decisions made by firms may not always produce maximum total profit because some executives
a. are more motivated by altruism. b. are more interested in market share than profits. c. may push research and development to the point that profits decline. d. All of the above are correct.
Suppose the government of a large open economy reduces its spending, so that national saving increases. The result is
A. an increase in the foreign country's net exports. B. a decrease in investment. C. an increase in the real interest rate. D. a decrease in the foreign country's net exports.