In the View of the New Classical Economists,an Increase in the Money

question 18

Multiple Choice

In the view of the new classical economists,an increase in the money supply will affect aggregate output and employment only if the increase in money supply is

• A)anticipated.
• B)expected.
• C)unanticipated.
• D)the result of an announced open market operation.

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Definitions:

Agency Problem

The possibility of conflicts of interest between the shareholders and management of a firm.

Leasing Benefits

Advantages obtained by renting assets, such as financial flexibility, lower upfront costs, and access to the latest technology.

Leasing

A financial arrangement wherein a person or company uses equipment, vehicles, or property for a specified period in exchange for regular payments to the owner.

Buying

The act of acquiring ownership or rights to a service or asset in exchange for money or value.