Monetarists argue that fiscal policy is ineffective because:
a. the velocity of money is predictable.
b. the crowding-out effect reduces investment.
c. prices and wages are sticky in the short run.
d. it causes the value of the dollar to depreciate.
Question 2
Which of the following is true?
a. Frictional unemployment implies a lack of available jobs.
b. During a recession, cyclical unemployment will be low.
c. When an economy is at full employment, actual unemployment will be less than the natural rate of unemployment.
d. When actual GDP equals potential GDP, the actual unemployment rate will equal the economy's natural rate of unemployment.
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