The Monetarist Assumption That Monetary Policy Cannot Change Long-Run Equilibrium

question 48

Multiple Choice

The monetarist assumption that monetary policy cannot change long-run equilibrium income is based on the idea that:

• A)the long-run aggregate supply curve is horizontal.
• B)the long-run Phillips curve is vertical.
• C)the price level in the long run is fixed.
• D)the aggregate demand curve cannot shift.
• E)the long-run Phillips curve is upward-sloping.

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Definitions:

Selling Division

A division within a company responsible for the sales and distribution of the company's products or services.

Transfer Price

The price at which goods and services are sold between units of the same organization.

Selling Division

The division or department within a company responsible for the sales and distribution of its products or services.

Outside Customers

Individuals or entities that purchase goods or services from a business but are not part of the business itself.