Monetarists Say

question 156

Multiple Choice

Monetarists say

• A)that, because P is stable, a change in M will change Q proportionately in the opposite direction.
• B)a change in the money supply will change aggregate demand and therefore the nominal GDP.
• C)a change in the money supply will change velocity, which in turn will change nominal GDP.
• D)a change in the money supply will change the interest rate, which will change investment spending and nominal GDP.

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Definitions:

Tax

A compulsory financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various prices.

Supply Curve

A graphical representation of the relationship between the price of a good and the amount of it that producers are willing to supply.

Equilibrium Price

The market price at which the supply of an item matches its demand, resulting in an efficient market condition where there is no excess supply or demand.