An Idea from Monetarism That Has Been Absorbed into Mainstream

question 247

Multiple Choice

An idea from monetarism that has been absorbed into mainstream macroeconomics would be the

• A) effects of aggregate supply shocks on the level of real output and the price level.
• B) importance of the effects of changes in the money supply on the economy.
• C) use of discretion rather than rules for guiding economic policy in the economy.
• D) influence of real changes, such as in technology and resource availability, on the level of output.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on shareholder matters.

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the company. These shares do not pay dividends and do not have voting rights.

Par Common Stock

The nominal or face value of a share of common stock as stated in the corporate charter, which has no direct relation to the market value.

Fair Market Price

This term refers to the price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.