41)If prices are flexible and there is no money illusion, then...

a.The central bank can influence potential GDP.

b.The central bank cannot influence the equilibrium inflation rate.

c.There is no inflation.

d.Money is neutral.

43)In the equation ionr= i0+ ( - *), a larger value of means...

a.A smaller response from the central bank is needed if inflation deviates from its target.

b.A larger response from the central bank is needed if inflation deviates from its target.

c.The monetary policy curve is flatter.

d.Interest rates are insensitive to changes in the actual inflation rate.

44)In the typical money demand equation,L=kY-hi, the componenthirepresents...

a.Transactions demand.

b.Speculative demand.

c.Precautionary demand.

d.Aggregate demand.