Which of the Following Is True About the Classical Theory

question 106

Multiple Choice

Which of the following is true about the Classical theory and the Monetarist theory with Regards to the impact of changes in the money supply on the economy?

• A)Both the Classical theory and Monetarism conclude that changes in money supply affect real GDP in the short run and in the long run.
• B)Both the Classical theory and Monetarism conclude that changes in money supply do not affect real GDP in the short run but will affect real GDP in the long run.
• C)Both the Classical theory and Monetarism conclude that changes in money supply affect nominal GDP in the long run.
• D)Both the Classical theory and Monetarism conclude that changes in money supply affect nominal GDP in the short run and real GDP in the long run.

Analyze and correct classification systems for consistency and adherence to principles.

Assess the concreteness of concepts and distinguish between concrete and abstract terms.

Understand the possibility of a species belonging to multiple genera.

Identify violations of classification rules and understand the implications of such violations.

---

Definitions:

Price Increase

A rise in the cost of goods or services, which can be due to various factors such as inflation, increased production costs, or higher demand.

Buckwheat Crop

Refers to the agricultural production of buckwheat, a plant cultivated for its grain-like seeds and as a cover crop.

Inverse Demand

A representation of the demand relationship that expresses price as a function of quantity demanded, illustrating how prices can vary with changes in demand.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing to buy and its price.