The Main Result of the Monetarist Model Is That

question 212

Multiple Choice

The main result of the monetarist model is that

• A)workers and firms have rational expectations.
• B)the quantity of money should be increased at a constant rate.
• C)productivity shocks explain fluctuations in real GDP.
• D)the economy is slow to adjust to sticky wages and prices.

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Definitions:

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for competition based on product differentiation.

Losses

Negative financial results that occur when a company's expenses exceed its revenues.

Monopolistically Competitive Industry

A market structure where many companies sell products that are similar but not identical, leading to competitive pricing and product differentiation.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms make neither excess profit nor losses in a perfectly competitive market.