Milton Friedman Explained That Increases in the Money Supply Will

question 27

Multiple Choice

Milton Friedman explained that increases in the money supply will temporarily reduce unemployment because

• A) wages do not respond to monetary policy.
• B) unions support policies that increase inflation.
• C) inflation benefits lenders.
• D) prices rise faster than wages.

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Definitions:

Proportion

A part, share, or number considered in comparative relation to a whole.

Independent

Not influenced or controlled by others; acting freely.

P(A|B)

The likelihood of event A happening provided that event B has taken place.

P(B|A)

The probability of event B occurring given that event A has already occurred.