Monetarists Contend That ________

question 31

Multiple Choice

Monetarists contend that ________.

• A) the self-correcting mechanism works slowly because wages are inflexible
• B) the aggregate supply curve does not move quickly to restore the economy to the natural rate of unemployment
• C) active government policy is required to restore the economy to full employment when unemployment is high
• D) the Bank of Canada should adopt and follow a money growth rule

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Definitions:

Consumer Price Index

A measure of the average change in prices over time that consumers pay for a basket of goods and services.

Salary Equivalent

The equivalent annual salary amount for non-standard work arrangements when comparing to a full-time salary rate.

Price Index

A measure showing how prices change over time for a fixed basket of products, used to monitor inflation or deflation.

Current Year Income

The total amount of money earned by an individual or entity within the current calendar year.