Monetarists Contend That

question 82

Multiple Choice

Monetarists contend that

• A)monetary policy affects aggregate demand solely through investment.
• B)monetary policy may affect aggregate demand through many channels.
• C)a weak link between nominal interest rates and investment spending implies monetary policy ineffectiveness.
• D)monetary policy affects aggregate demand solely through consumption.

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Definitions:

Price Elasticity

A measure of the sensitivity of demand or supply for a product or service to changes in its price.

Incidence

The measure or rate at which a particular phenomenon occurs, often used in the context of disease or taxation.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied reacts to the smallest change in price with an infinite amount of change in quantity.

Excise Tax

A targeted tax levied on the sale of specific goods and services, such as alcohol and tobacco, often used to discourage consumption.