Question
The concept known as the neutrality of money suggests: a. that changes in the money supply has no impact on the economy--none. b. that changes
The concept known as the "neutrality of money" suggests:
a. that changes in the money supply has no impact on the economy--none.
b. that changes in the money supply typically alter the velocity of money.
c. that low interest rates may increase interest sensitive expenditures.
d. that changes in the money supply would have no impact on real economic variables, e.g. employment.
In reaction to the last recession, household saving increased. Unfortunately, this was likely an additional drag on the economy in the short-run. This phenomenon is known as
a. the neutrality of money.
b. Say's Law.
c. crowding out.
d. the paradox of thrift.
Changes in autonomous consumption would
a. shift the consumption function
b. not affect consumption at all.
c. change the marginal propensity to consume (ie, change the slope of the consumption function)
d. cause a movement along the consumption function
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