When all changes in the world are due to
A) fiscal policy, purchasing power parity holds true in the long run.
B) monetary policy, purchasing power parity does not hold true in the long run.
C) monetary policy, purchasing power parity holds true in the long run.
D) monetary policy, purchasing power parity holds true even in the short run.
E) fiscal and monetary policy, purchasing power parity holds true in the long run.
C
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Consumption spending is $22 million, planned investment spending is $7 million, actual investment spending is $7 million, government purchases are $9 million, and net export spending is $3 million
Based on this information, which of the following is true? A) Aggregate expenditure is equal to GDP. B) Aggregate expenditure is greater than GDP. C) Aggregate expenditure is less than GDP. D) There was an unplanned change in inventories.
Real money demand in the economy is given by
L = 0.3Y - 600i, where Y is real income and i is the nominal interest rate. In equilibrium, real money demand L equals real money supply M/P. Suppose that Y equals 2000 and the real interest rate is 5%. (a) At what rate of inflation is seignorage maximized? (b) What is the maximum amount of seignorage revenue?