Podcast
Questions and Answers
What is another name for the classical theory of the price level?
What is another name for the classical theory of the price level?
- Classical theory of aggregate supply
- Quantity theory of money (correct)
- Keynesian theory of inflation
- Modern equilibrium theory
In which eighteenth-century economist's work can early versions of the classical theory be found?
In which eighteenth-century economist's work can early versions of the classical theory be found?
- Adam Smith
- John Maynard Keynes
- David Hume (correct)
- Milton Friedman
Why is it important to study the classical theory of money?
Why is it important to study the classical theory of money?
- To critique the flaws in the classical theory
- To understand inflation in high-inflation countries
- To comprehend the functioning of modern equilibrium theories (correct)
- To analyze the impact of monetary policy on employment
According to the text, in which type of countries does the classical theory work well?
According to the text, in which type of countries does the classical theory work well?
What is another name for the classical explanation for inflation according to the text?
What is another name for the classical explanation for inflation according to the text?
Which theories build on the classical theory by being clear about the factors that lead households and firms to vary their demands and supplies for labor through time?
Which theories build on the classical theory by being clear about the factors that lead households and firms to vary their demands and supplies for labor through time?
According to the classical theory of aggregate demand and supply, what is the main function of money?
According to the classical theory of aggregate demand and supply, what is the main function of money?
Which equation represents the quantity theory of money in the classical system?
Which equation represents the quantity theory of money in the classical system?
What does the quantity theory of money state about the price level?
What does the quantity theory of money state about the price level?
In the classical system, what is the role of money in determining employment and output?
In the classical system, what is the role of money in determining employment and output?
What happens to commodity prices in the classical system when there is an increase in the quantity of money?
What happens to commodity prices in the classical system when there is an increase in the quantity of money?
How does an increase in the quantity of money affect the money wage rate in the classical system?
How does an increase in the quantity of money affect the money wage rate in the classical system?
What does the classical theory propose about the role of money in determining employment and output?
What does the classical theory propose about the role of money in determining employment and output?
According to the classical theory, what determines employment, income, and output?
According to the classical theory, what determines employment, income, and output?
What is the notion of neutrality of money in the classical system explained in terms of?
What is the notion of neutrality of money in the classical system explained in terms of?
What does the quantity theory of money suggest about changes in the supply of money?
What does the quantity theory of money suggest about changes in the supply of money?
