Using the Monetarist Model, Place the Following Events in the Order

question 312

Multiple Choice

Using the monetarist model, place the following events in the order in which they occur in a business cycle.
I. Money wages fall and the SAS curve shifts rightward.
II. The Federal Reserve decreases the growth rate of the quantity of money.
III. The AD curve shifts leftward.

• A) II, III, I
• B) III, II, I
• C) I, III, II
• D) The events are not part of a monetarist model of the business cycle.

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