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Posted: April 10th, 2022
Discuss proposition that a change in rate of growth of money
1. Discuss the proposition that a change in the rate of growth of the money supply will not affect output and unemployment in the short run, as well as in the long run, if wages and prices are fully ?exible.
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2. "The rate of money growth is the sole determinant of aggregate demand and the trend rate of in?ation, and the stance of ?scal policy is irrelevant." Discuss.
3. "In response to demand shocks, short-term price adjustments by markets occur earlier than quantity adjustments at the level of both the ?rm and the economy." Discuss the relevant theory behind this statement. Also, discuss its empirical validity at the macroeconomic level.
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