According to the Monetarist View, the Impact of Expansionary Monetary

question 57

Multiple Choice

According to the Monetarist view, the impact of expansionary monetary policy will be:

• A) a decrease in the price level in the long-run .
• B) the same regardless of whether the effects of the policy are anticipated or unanticipated.
• C) a higher price level (inflation).
• D) a decrease in short-run prices and an increase in long-run prices.

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Definitions:

Short-Term Investment

Financial assets that are expected to be converted into cash or sold within a year.

Monetary Assets

Monetary assets are financial assets that are cash or can be quickly converted into a known amount of cash with minimal risk of changes in value.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Notes Receivable

Financial assets representing money owed to the holder of the note, usually in the form of a formal written agreement.