When Comparing the Keynesian Approach and the Monetarist Approach, the Only

question 56

Multiple Choice

When comparing the Keynesian approach and the monetarist approach, the only substantive difference is that

• A)the Keynesian equation leads to a prediction of real GDP, while the monetarist equation leads to a prediction of nominal GDP.
• B)Keynesians concentrate on aggregate demand and monetarists concentrate on aggregate supply.
• C)Keynesians approach aggregate demand by multiplying the money supply by velocity, while monetarists use the equilibrium conditions of the expenditure schedule.
• D)Keynesian analysis suggests that money affects consumption first, while monetarist analysis suggests that money affects investment spending first.

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Definitions:

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate, representing its legal value.

Compounded Annually

The process where interest is calculated once per year on the initial principal, including all interest from previous periods.

Equal Annual Deposits

This term refers to a series of uniform payments made or received over a period, often used in the context of saving or investment strategies.

FASB Financial Accounting Concepts

A framework of accounting standards and guidelines established by the Financial Accounting Standards Board to ensure uniformity and clarity in financial reporting.