The main result of the monetarist model is that
A) the economy is slow to adjust to sticky wages and prices.
B) workers and firms have rational expectations.
C) the quantity of money should be increased at a constant rate.
D) productivity shocks explain fluctuations in real GDP.
Question 2
Assume the United States is the domestic country and Switzerland is the foreign country. Which of the following might decrease the real exchange rate between the United States and Switzerland?
A) a depreciation of the franc B) an appreciation of the dollar
C) a decrease in the price level in Switzerland D) a decrease in the price level in the United States
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