Monetarists and Classical Economists Assume That

question 118

Multiple Choice

Monetarists and classical economists assume that:

• A)stimulative monetary policy will create high levels of GDP without inflation.
• B)stimulative monetary policy will create high levels of GDP and slightly high prices.
• C)the economy operates at full employment and stimulative monetary policy will only cause the price level to rise.
• D)the economy operates at full employment and stimulative monetary policy will increase both aggregate supply and aggregate demand.
• E)the Keynesian description of monetary policy underestimates the true stimulative effect of an increase in the money supply.

---

Definitions:

Water Pollution

Contamination of water bodies such as rivers, lakes, oceans, and groundwater due to harmful substances, leading to detrimental effects on aquatic life and human health.

Standard of Living

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Public Good

A good that is non-excludable and non-rivalrous, meaning that one person's consumption does not reduce its availability to others and people cannot be prevented from using it.

Communist Governments

Government systems where the state owns and controls all major aspects of the economy, aiming for classless society and elimination of private property.