According to Classical Macroeconomic Theory,changes in the Money Supply Affect

question 17

Multiple Choice

According to classical macroeconomic theory,changes in the money supply affect

• A)nominal variables and real variables.
• B)nominal variables,but not real variables.
• C)real variables,but not nominal variables.
• D)neither nominal nor real variables.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method, or decision.

Representativeness Heuristic

A cognitive shortcut used in decision-making that involves judging the likelihood of an event based on how closely it matches a prototype or stereotype.

Belief Perseverance

The phenomenon where individuals stick to their initial beliefs even when confronted with contrasting evidence.

Representativeness Heuristic

A cognitive shortcut that involves judging the likelihood of an event based on how closely it resembles a typical case.