The Policy Irrelevance Proposition States That

question 87

Multiple Choice

The policy irrelevance proposition states that

• A) only relatively large expected changes in monetary policy impact the economy.
• B) anticipated changes in monetary policy are ineffective in changing real GDP.
• C) only statements from the White House have impact on the economy.
• D) in the short run unanticipated changes in monetary policy are ineffective in changing real GDP.

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Definitions:

Receivables Turnover

A financial metric that measures how efficiently a company collects cash from its credit sales by dividing credit sales by the average accounts receivable.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Working Capital

A financial metric representing the difference between a company's current assets and current liabilities.

Current Liabilities

Short-term financial obligations due within one year or less, which a company needs to pay with its current assets.