Which of the Following Statements About the Monetarist View of the Macroeconomy

question 63

Multiple Choice

Which of the following statements about the monetarist view of the macroeconomy is incorrect?

• A)Left alone, the economy rarely operates at full employment.
• B)All recessions result from inappropriate monetary policy.
• C)The money wage rate is sticky.
• D)Taxes should be kept low to avoid disincentive effects that decrease potential GDP.
• E)Provided that the quantity of money is kept on a steady growth path, no active stabilization is needed to offset changes in aggregate demand.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in a net income or loss.