In the Monetarist View, the Money Supply Affects the Economy

question 87

Multiple Choice

In the monetarist view, the money supply affects the economy

• A)through investment spending and government spending.
• B)indirectly through interest rates.
• C)directly, apart from interest rates.
• D)by altering the size of the money multiplier.

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Definitions:

Market Price

The current price at which an asset or service is bought or sold in the marketplace.

Capital Accounts

Financial records showing the ownership interests and funds contributed or withdrawn by owners or investors in a company.

Target Capital Structure

The ideal mix of debt, preferred stock, and common equity that a company aims to hold in order to minimize its cost of capital and maximize its value.

Floatation Costs

Expenses incurred by a company in issuing new securities, including underwriting fees and registration fees.