20) The introduction of money in the traditional Walrasian system ... a) .. proves Say's law and money neutrality, since increases in the money supply create higher money demand by causing an acceleration of GDP growth and inflation b) . proves Say's law and money neutrality, since increases in the money supply raise money velocity because GDP growth and inflation accelerate C) .. makes Say's law not valid because supply of products may not automatically generate demand for products, as agents reject holding any monetary balance due to inflation d) .. makes Say's law not valid because an increase in the money supply imply a reduction in the supply of goods and services e) . makes Say's law not valid because supply of products may not automatically generate demand for products, as agents may choose to temporarily hold money and not demand goods 21) The "Classic Dichotomy" refers to the theoretical implication that a. Relative prices are determined only by real variables like consumer preferences and availability of products, whereas the money supply may determine the price level and real output, thus suggesting money is not neutral in the short run b. Real prices and GDP are determined by the money supply and the real balance effect, whereas nominal prices and wages are determined by consumer preferences and the labor supply C. Relative prices are determined only by real variables like consumer preferences and availability of products, whereas the money supply determines only the price level, thus determining complete money neutrality d. Real prices and profits are determined by a combination of nominal prices and sticky wages, so firms have an incentive to produce more as prices go up, therefore creating the possibility of monetary expansion leading to higher GDP and inflation e. Relative prices are determined only by real variables like consumer preferences and availability of products, whereas the money supply may determine the price level and real output, thus suggesting money is neutral in the short run f. Real prices and profits are determined by a combination of sticky prices and flexible wages, so firms have an incentive to produce more as wages fall, therefore creating the possibility of monetary contraction leading to higher GDP and inflation 22) The traditional Phillips Curve did a _job reflecting the US economy in the 1970s, since_ a ) good; actual data showed a stable, positive relationship between economic growth and unemployment b) good; actual data showed a fairly stable, positive relationship between inflation and unemployment C) good; actual data showed a fairly stable, negative relationship between inflation and unemployment d) poor; actual data showed a stable, positive relationship between economic growth and unemployment e ) poor; actual data showed virtually no relationship between inflation and unemployment f ) poor; actual data showed a mostly positive relationship between inflation & unemployment