Description of this paper

The quantity theory of money relates money, prices, velocity, and output.

Description

solution


Question

8. The quantity theory of money relates money, prices, velocity, and output. According to the quantity theory of money;A. real output and velocity increase with the money supply;B. an increase in the money stock will decrease prices;C. an increase in the money stock will decrease GDP;D. real output and velocity are independent of the money supply;=============================;9. If money supply is rising and velocity is falling;A. the impact on inflation and real GDP is uncertain;B. inflation will rise;C. inflation will fall;D. real GDP will rise;===============================;10. Suppose the Federal Reserve purchases $10 million in Treasury bills from the public (a so-called open market purchase) during a period when there were no excess reserves in the banking system. The reserve requirement is 20%. The money supply has the potential to;A. increase by $10 million;B. fall by $50 million;C. increase by $50 million;D. fall by $20 million

 

Paper#27896 | Written in 18-Jul-2015

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