Which One of the Following Statements Is the MOST Accurate

question 45

Multiple Choice

Which one of the following statements is the MOST accurate?

• A) A permanent increase in the money supply cannot have any short-run effects.
• B) A permanent increase in taxes cannot have any short-run effects.
• C) A permanent decrease in the money supply cannot have short-run effects.
• D) A permanent decrease in taxes cannot have short-run effects.
• E) A permanent increase in money demand can be offset with a permanent increase in the money supply of equal magnitude.

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Definitions:

Proceeds

Proceeds refer to the total amount of money received from a transaction, such as the sale of goods, assets, or securities.

Compounded Quarterly

Compounded quarterly refers to the method of calculating interest where the interest is added to the principal at the end of each quarter, resulting in interest being earned on previously accumulated interest.

Financial Obligations

Debts, liabilities, or commitments that an entity is required to pay or fulfill in the future.

Inheritance

Assets received from someone who has passed away, often as specified in their will or through the law of intestacy.