The Monetarist Model Differs from the Classical Model in That

question 12

Multiple Choice

The Monetarist model differs from the classical model in that

• A)changes in aggregate demand,not aggregate supply,drive changes in output.
• B)changes in the money supply drive changes in inflation inflation.
• C)changes in aggregate supply,not aggregate demand,drive changes in ouput.
• D)money demand is not always stable.
• E)none of the above.

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Definitions:

Income Elasticity

A measure of how much the demand for a good responds to a change in consumers' income.

Total Revenue

The total income generated by a firm from the sale of goods or services before any costs or expenses are subtracted.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.

Demand Increase

A situation where the quantity of a product or service that consumers are willing and able to buy at a given price rises.