Which of the Following Is True About the Classical Theory

question 107

Multiple Choice

Which of the following is true about the classical theory and the monetarist theory with
Regards to the impact of changes in the money supply on the economy?

• A) Both the classical theory and monetarism conclude that changes in money supply affect real GDP in the short run and in the long run.
• B) Both the classical theory and monetarism conclude that changes in money supply do not affect real GDP in the short run but will affect real GDP in the long run.
• C) Both the classical theory and monetarism conclude that changes in money supply affect nominal GDP in the long run.
• D) Both the classical theory and monetarism conclude that changes in money supply affect nominal GDP in the short run and real GDP in the long run.

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Definitions:

Transmission Division

A specialized segment within a company that focuses on the development, production, and distribution of transmission systems for vehicles.

Customer Service Department

The division of a company focused on addressing customer inquiries, complaints, and service requests.

Operating Divisions

Operating divisions are distinct sectors within a company that focus on different products or markets, each potentially with its own management structure.

Fixed Costs

Financial obligations like rent, salaries, and insurance that remain steady, irrespective of the levels of sales or production achieved.