According to the classical model:

A) the aggregate supply curve is horizontal

B) Increases in the money supply lead to proportional increases in the price level, but no change in real output

C) Increases in the money supply lead to proportional changes in output, but no change in the price level

D) we are all dead in the long run

Debt deflation is the :

A) Increase in aggregate supply caused by deflation

B) Reduction in aggregate supply caused by deflation

C) Increase in aggregate demand cause by deflation

D) reduction in aggregate demand cause by deflation

The inflation tax is:

A) the increase in the real value of money held by the public caused by inflation

B) the decrease in the real value of money held by the public caused by inflation

C) the result of the indexing wages to inflation

D) Cost of living adjustments, or COLAS

unemployment rates are usually higher in Europe than in the united states because:

A) the minimum wage is higher in the US than in europe

B) Economic policy in the US is much more effective than European economic policy

C) there are more unskilled uneducated workers in Europe than in the US

D) unemployment benefits are more generous in Europe than in the United States