On the Basis of Both Theory and Empirical Evidence, Most

question 54

Multiple Choice

On the basis of both theory and empirical evidence, most economists believe that changes in monetary policy have

• A)important long- run effects by changing real interest rates.
• B)no effect on real GDP or inflation in the long run.
• C)no effect on real GDP or factor utilization in the short run.
• D)no long- run effect on real GDP but a substantial long- run effect on inflation.
• E)powerful effects on real GDP and factor prices both in the short run and in the long run.

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Definitions:

AASB 101

An accounting standard that specifies the requirements for the presentation of financial statements, ensuring their comparability both with the entity's financial statements of previous periods and with those of other entities.

Annually

Occurring once every year or relating to a period of one year.

Financial Statements

Official records that detail the financial activities and condition of a business, government, or other entity.

Interest Revenue

Income earned by an entity from its investments that pay interest, such as bonds, savings accounts, or loans extended to others.