Classical (not neoclassical, but classical) economics Question The quantity theo

Question

Classical (not neoclassical, but classical) economics

Question

The quantity theory of money tells us that total spending equals

Question

According to the lecture, which of the following economists was not significantly influenced by Fisher?

Question

We said in lecture that Americans tend to ______ estimate the inflation rate in the United States and seem to think inflation is ___________ of a pressing concern than most economists do.

Question

Those who support free markets would tend to support ____________ when an asset price bubble exists (or is suspected to).

Explanation / Answer

assumes prices are flexible and adjust to economic changes. Classicists were always in favor of free markets nominal GDP when a nation does not trade. Quantity theory of money = MV = PQ whers M is MOney supply, V is velocity of money, P is general Price level and Q is Quantity produced. Keynes over; morel little or no Fed action . Free markets believs in invisible hand, i.e markets will clear automatialy witout fed intervention.

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