Author Question: According to the monetarists, deliberate government intervention: a. will stabilize the economy if ... (Read 113 times)

gonzo233 · **on:** Jun 30, 2018

According to the monetarists, deliberate government intervention:
a. will stabilize the economy if the money supply is increased during recessions and decreased during expansions.
b. will effectively reduce the unemployment rate below its natural rate.
c. will stabilize the economy if the money supply is reduced during recessions and increased during expansions.
d. will destabilize the economy only if the government uses fiscal policy to change equilibrium income.
e. will destabilize the economy and cause a business cycle of its own, regardless of whether fiscal or monetary policy is used.

Question 2

If an increase in price causes total expenditure on a product to decrease, then the price elasticity of demand is:
a. inelastic.
b. elastic.
c. unit elastic.
d. zero.