Classical Economists Would Explain the Fact That Money Is a Leading,procyclical

question 80

Multiple Choice

Classical economists would explain the fact that money is a leading,procyclical macroeconomic variable by pointing out that

• A)money is not neutral,and changes in the nominal money supply affect real variables.
• B)increasing the money supply shifts the LM curve,reducing real interest rates and causing an economic expansion.
• C)increasing the money supply increases aggregate demand,causing higher levels of employment and output.
• D)when money demand rises because of a beneficial productivity shock,the Central Bank increases the money supply to prevent the price level from falling.

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Definitions:

Opium

A narcotic drug extracted from the seed capsules of the poppy plant, used historically as a pain reliever and recreationally for its euphoric effects.

Profane

Elements of the everyday world that do not inspire or motivate.

Sacred

Describing something regarded with immense respect or worshipful veneration, often associated with religious or spiritual significance.

Supernatural

Pertaining to or believed to exist outside of the natural world's laws and phenomena, often involving deities, spirits, and other entities beyond scientific explanation.