Monetarists Say

question 156

Multiple Choice

Monetarists say

• A)that, because P is stable, a change in M will change Q proportionately in the opposite direction.
• B)a change in the money supply will change aggregate demand and therefore the nominal GDP.
• C)a change in the money supply will change velocity, which in turn will change nominal GDP.
• D)a change in the money supply will change the interest rate, which will change investment spending and nominal GDP.

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Definitions:

Legal Tender

Currency that must be accepted if offered in payment of a debt, as decreed by a country's government.

Exact Tender

The requirement for a payment in the precise amount owed, without needing change.

Customary

Practices or actions that are accepted and expected within a particular community or society, based on traditions or long-standing use.

Frustrated

In legal terms, it refers to a contract or agreement that has become impossible to execute as initially intended due to unforeseen circumstances.