Monetarists and Classical Economists

Multiple Choice

Monetarists and classical economists:

A) assume that stimulative monetary policy will create high levels of GDP without inflation.
B) assume that stimulative monetary policy will create high levels of GDP and slightly high prices.
C) assume the economy operates at full employment and stimulative monetary policy will only cause the price level to rise.
D) assume that the economy operates at full employment and stimulative monetary policy will increase both aggregate supply and aggregate demand.
E) assume that the Keynesian description of monetary policy underestimates the true stimulative effect of an increase in the money supply.