Which of the Following Statements Is True

question 11

Multiple Choice

Which of the following statements is true?

• A)​In a static model, an economy is assumed to start at a point where all variables are constant.
• B)​In the dynamic model of money, the longer prices take to adjust to shocks, the more long­lived is the liquidity effect.
• C)​In the dynamic model of money, all variables are initially growing at an increasing rate but they eventually reach a steady state.
• D)​Money supply is the only endogenous variable in the dynamic model of money.

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Definitions:

Assets Component

Parts or elements that make up the total value of assets owned by an individual or organization.

Money Supply

The money supply is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Money Supply

is the total amount of monetary assets available in an economy at any given time.

Bond Sale

A bond sale involves the issuance of bonds by an entity to raise capital, where buyers are essentially loaning money to the issuer for a predetermined time period, with the promise of interest payments.