The Monetarist Transmission Mechanism Through Which Monetary Policy Affects the Price

question 1

Multiple Choice

The Monetarist transmission mechanism through which monetary policy affects the price level, real GDP, and employment depends on the:

• A) indirect impact of changes on the interest rate.
• B) indirect impact of changes on profit expectations.
• C) direct impact of changes in fiscal policy on aggregate demand.
• D) direct impact of changes in the money supply on aggregate demand.

---

Definitions:

New Behavior

Refers to actions or patterns of activity that are different from previous behaviors, often in response to changes in the environment or learning.

Reinforced

Strengthened or emphasized through additional support, material, or information.

Cognitive Imagery Techniques

Psychological strategies that involve using mental images to improve behavior, emotions, and cognitive processes.

Progressive Muscle Relaxation

A technique in which individuals deliberately tense and then relax specific muscle groups to reduce stress and achieve physical relaxation.