Order the answer to: Place “MON,” “RET,” or “MAIN”…
|Question||Place “MON,” “RET,” or “MAIN” beside the statements that most closely reflect monetarist, rational expectations, or mainstream views, respectively: a. Anticipated changes in aggregate demand affect only the price level; they have no effect on real output. b. Downward wage inflexibility means that declines in aggregate demand can cause long-lasting recession. c. Changes in the money supply M increase PQ; at first only Q rises because nominal wages are fixed, but once workers adapt their expectations to new realities, P rises and Q returns to its former level. d. Fiscal and monetary policies smooth out the business cycle. e. The Fed should increase the money supply at a fixed annual rate.|
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