QUESTION 1The major difference between the Keynesian approach and the monetarist approach is that a.there are no differences. b.Keynesian analysis explains an equilibrium condition and monetarism does not. c.monetarism explains an equilibrium condition and Keynesian analysis does not. d.in Keynesian analysis, money affects the economy by first affecting interest rates; monetarist analysis is not limited to working through interest rates. QUESTION 2When comparing the Keynesian and monetarist approaches, the only substantive difference is that a.Keynesians approach aggregate demand by multiplying the money supply by velocity, while monetarists use the equilibrium conditions of the expenditure schedule. b.Keynesian analysis suggests that money affects consumption first while monetarist analysis suggests that money affects investment spending first. c.the Keynesian equation leads to a prediction of real GDP; the monetarist equation leads to a prediction of nominal GDP. d.Keynesians concentrate on aggregate demand and monetarists concentrate on aggregate supply. QUESTION 3President George W. Bush's tax cut in 2001 was a rare example of a.timely fiscal policy. b.the inability of Congress to react to policy needs. c.timely monetary policy. d.the slow response of policy to events. QUESTION 3President George W. Bush's tax cut in 2001 was a rare example of a.timely fiscal policy. b.the inability of Congress to react to policy needs. c.timely monetary policy. d.the slow response of policy to events. QUESTION 5Monetarists have received this label because they emphasize the role of a.the money supply in determining nominal GDP. b.money supply in determining aggregate supply. c.the Fed in making monetary policy. d.the money supply in determining interest rates and investment.

Milton Friedman is primarily responsible for the monetarist school of thinking, which emerged as a…

Answered: The major difference between the…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section17.3: Monetarism And The Economy

Problem 2R

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QUESTION 1

The major difference between the Keynesian approach and the monetarist approach is that

	a.	there are no differences.
	b.	Keynesian analysis explains an equilibrium condition and monetarism does not.
	c.	monetarism explains an equilibrium condition and Keynesian analysis does not.
	d.	in Keynesian analysis, money affects the economy by first affecting interest rates; monetarist analysis is not limited to working through interest rates.

QUESTION 2

When comparing the Keynesian and monetarist approaches, the only substantive difference is that

	a.	Keynesians approach aggregate demand by multiplying the money supply by velocity, while monetarists use the equilibrium conditions of the expenditure schedule.
	b.	Keynesian analysis suggests that money affects consumption first while monetarist analysis suggests that money affects investment spending first.
	c.	the Keynesian equation leads to a prediction of real GDP; the monetarist equation leads to a prediction of nominal GDP.
	d.	Keynesians concentrate on aggregate demand and monetarists concentrate on aggregate supply.

QUESTION 3

President George W. Bush's tax cut in 2001 was a rare example of

	a.	timely fiscal policy.
	b.	the inability of Congress to react to policy needs.
	c.	timely monetary policy.
	d.	the slow response of policy to events.

QUESTION 3

President George W. Bush's tax cut in 2001 was a rare example of

	a.	timely fiscal policy.
	b.	the inability of Congress to react to policy needs.
	c.	timely monetary policy.
	d.	the slow response of policy to events.

QUESTION 5

Monetarists have received this label because they emphasize the role of

	a.	the money supply in determining nominal GDP.
	b.	money supply in determining aggregate supply.
	c.	the Fed in making monetary policy.
	d.	the money supply in determining interest rates and investment.

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