Which of the Following Is Consistent with the Monetarist View

question 122

Multiple Choice

Which of the following is consistent with the monetarist view?

• A)A reduction in taxes will leave the value of real output unaffected.
• B)Prices may be affected by increases in G or reductions in T.
• C)Changes in M may cause changes in V and Q in the long run.
• D)Monetary policy should be used to correct a shortfall in aggregate demanD.This follows the logic of crowding out: lower taxes will lead to lower government spending but ultimately to higher private sector spending.