One of the Main Insights of Monetarism Is That

question 125

Multiple Choice

One of the main insights of monetarism is that:

• A) the government can effectively manage aggregate demand by using its spending and taxing powers.
• B) inflation can continue indefinitely without the cooperation of the central bank.
• C) sustained inflation is a monetary phenomenon.
• D) velocity is unstable and subject to wide fluctuations.

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Definitions:

Supply

Represents the total amount of a product or service available to consumers in a market at any given time.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded in the market.

Quantity Demanded

The amount of a product that consumers are willing and able to purchase at a given price over a specified period.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specified period of time.