J
Jason
Guest
Which of the following statements is CORRECT?
a. The money supply does not play a role in creating sustained inflation.
b. The Fed is "accommodating" when G increases and the money supply decreases.
c. An increase in G results in no change in the price level if an economy operates on the vertical portion of its aggregate supply curve.
d. A lower price level causes the demand for money to decrease.
e. Higher prices require a decrease in the money supply to keep the interest rate constant and eliminate the crowding-out effect of a higher interest rate.
a. The money supply does not play a role in creating sustained inflation.
b. The Fed is "accommodating" when G increases and the money supply decreases.
c. An increase in G results in no change in the price level if an economy operates on the vertical portion of its aggregate supply curve.
d. A lower price level causes the demand for money to decrease.
e. Higher prices require a decrease in the money supply to keep the interest rate constant and eliminate the crowding-out effect of a higher interest rate.