In the New Classical View, Whether Changes in the Nominal

question 81

Multiple Choice

In the new classical view, whether changes in the nominal money supply affect output in the short run depends on whether

• A)the changes are expected or unexpected.
• B)prices are flexible or inflexible.
• C)the nominal interest rate is affected by changes in the money supply.
• D)the Fed reacts passively or actively to the onset of recessions.

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Definitions:

Adipose

A type of body tissue containing stored fat, serving both as a source of energy and a cushion for bodily organs.

Meninges

The three layers of protective tissue called the dura mater, arachnoid, and pia mater that surround the brain and spinal cord.

Muscle

A tissue in animal bodies composed of fibers capable of contracting to effect bodily movement.

Glossopharyngeal

Relating to the ninth cranial nerve, important for swallowing, saliva production, and the sensation of taste and touch from the posterior part of the tongue.