Romer and Romer Found Evidence That Money Is Not Neutral

question 61

Multiple Choice

Romer and Romer found evidence that money is not neutral because

• A)in several episodes, such as 1979-1982, changes in monetary policy led to recessions.
• B)they found that inflation was highly correlated with the rate of growth of the money supply.
• C)if money were neutral, no one would care what the Fed does.
• D)they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.

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Definitions:

Role Expectations

The anticipated behaviors and actions associated with a particular position or status within a group or society.

Proactive

Taking initiative by acting in advance of future situations or problems, rather than just reacting to them as they occur.

Building Trust

The process of establishing confidence and reliability in relationships through consistent actions and honesty.

One-Way Process

A type of communication or operation that moves in a single direction, without receiving feedback or interaction from the receiving end.