If a contractionary monetary policy reduces nominal income in the short run, but not real income, it must be true that prices:
A) are perfectly flexible.
B) are at least partially flexible.
C) are completely inflexible.
D) have not fully adjusted to the change in aggregate demand.
Correct Answer:
Verified
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Q36: If nominal income increases by 3 percent
Q37: If prices are inflexible, monetary policy:
A)affects both
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Q40: Refer to the graph shown. Monetary policy
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Q42: Central banks are responsible for:
A)both monetary policy
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Q44: The central bank of the United States
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