According to monetarists, the main cause of change in the level prices are changes in

Which of the following is a statement with positive economic analysis?

A) Lower wages increase employment and reduce the unemployment rate. B) Slower money growth reduces inflation. C) A reduction in the size of the budget deficit will reduce interest rates. D) all of the above

Relative percentage changes are used in measuring price elasticity of demand, so that

A) it does not matter whether price increases or decreases when calculating the elasticity. B) it does not matter what units are used to measure prices or quantities. C) we always obtain a positive number. D) larger numbers indicate greater responsiveness.