Which of the following statements is (are)correct?
A)Both the monetarists and classicists agree that output is completely supply determined,even in the short run
B)The monetarists do not agree with the classical position that monetary policy cannot be used to influence output.
C)According to both the monetarists and the classicists,output is determined by demand side factors in the short run
D)None of the above

Question

Quizplus · Accepted Answer

The statement that the monetarists do not agree with the classical position that monetary policy cannot be used to influence output is correct. The monetarists believe that money supply plays a significant role in determining the level of output and inflation in the short run, and thus monetary policy can be used to stabilize the economy. However, both the monetarists and the classical economists believe that output is primarily determined by supply-side factors in the long run, such as technology, capital accumulation, and labor force growth.

Which of the Following Statements Is (Are)correct