The Economic Response to the Overnight Reduction in the French

question 99

Multiple Choice

The economic response to the overnight reduction in the French money supply by 20 percent in 1724,

• A) confirmed the neutrality of money because no real variables were affected by this nominal change.
• B) confirmed the quantity theory by leading to an immediate 20 percent reduction in the price level.
• C) confirmed that money is not neutral in the short run because both output and prices dropped.
• D) contradicted Okun's law because decreases in output were not associated with increases in unemployment.

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Definitions:

Blastopore

The opening formed during early embryonic development in animals, which can develop into the mouth or anus depending on the species.

Radial Cleavage

A pattern of animal embryonic development in which the divisions of the egg are symmetrical around the polar axis, typical of deuterostomes.

Vertebral Column

The spine, the rigid, bony structure in the midline of the back; composed of vertebrae.

Hemoglobin

A protein in red blood cells responsible for carrying oxygen from the lungs to the rest of the body.