In Monetarist Business Cycle Theory, Decreasing the Growth Rate of the Quantity

question 325

Multiple Choice

In monetarist business cycle theory, decreasing the growth rate of the quantity of money ________ and increasing the growth rate of the quantity of money ________.

• A) increases real GDP; decreases the inflation rate
• B) decreases real GDP; decreases the inflation rate
• C) causes the economy to enter a recession; causes the economy to enter an expansion
• D) causes the economy to enter an expansion; causes the economy to enter a recession

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Definitions:

Liabilities

Monetary liabilities or dues that a company or person has to pay back to lenders.

Equity

The value that would be returned to a company's shareholders if all of the assets were liquidated and all of the debts were paid off.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Balance Sheet

An economic report indicating a company's possessions, financial responsibilities, and the value belonging to shareholders at a certain instance.