Which of the Following Is True

Multiple Choice

Which of the following is true?

A) When increased government purchases or expansionary monetary policy does give the economy a boost, no one knows precisely how long it will take to do so.
B) Given the difficulties of timing stabilization policy, a contractionary monetary policy intended to reduce the severity of a recession may instead add inflationary pressures to an economy that is already overheating.
C) If velocity changes but moves in a fairly predictable pattern, the connection between the money supply and GDP is still unpredictable.
D) When the economy is operating at levels significantly lower than the full-employment output, input prices are flexible.
E) Government estimates of the real GDP and the value of the multiplier are always correct.