The higher the expected inflation rate in a country, the lower is the nominal interest rate in that country

If the AS and the AD curve intersect at a level of real GDP that exceeds potential GDP, then the appropriate monetary policy is one that ________ the federal funds rate and ________ aggregate demand

A) raises; increases B) lowers; decreases C) raises; has no effect on D) lowers; increases E) raises; decreases

The monetarists would expect a tax cut to have a strong effect on output only if the spending increase was

a. financed by a sale of bonds. b. financed by a cut in government spending. c. financed by an increase in the money stock. d. accompanied by a reduction in the deficit.