+1-415-670-9189
info@expertsmind.com
The quantity theory of money states
Course:- Business Economics
Reference No.:- EM13795738




Assignment Help
Assignment Help >> Business Economics

1. According to the principle of monetary neutrality:

a. Changes in the money supply do not affect real variables.

b. Real variables do not affect nominal variables.

c. Nominal variables are not adjusted for inflation and real units are adjusted for inflation.

d. Nominal variables are expressed in monetary units and real variables are expressed in physical units.

2. The velocity of money is:

a. The speed at which the money multiplier works.

b. The speed at which prices rise in the economy.

c. The time it takes for checks to be cleared by the Fed.

d. The rate at which money changes hands.

3. If the Fed increased the supply of money, and velocity remains unchanged, according to the quantity equation:

a. P x Y must decrease.

b. Y must decrease.

c. P x Y must increase.

d. Y must increase.

4. When inflation turns out to be higher than expected, borrowers will be ________ off, and lenders will be ________ off.

a. Better, better

b. Better, worse

c. Worse, worse

d. Worse, better

5. Suppose the value of goods and services produced in an economy is $10 billion, but the total money supply is $1 billion, what is the velocity of money?

a. 0

b. 1

c.5

d. 10

6. The quantity theory of money states that:

a. All else equal an increase in money growth will lead to a proportionate increase in prices in the long-run.

b. All else equal an increase in money growth will lead to a proportionate increase in prices in the short-run.

c. An increase in money growth can lead to inflation if and only if velocity is constant.

d. An increase in money growth must lead to a decrease in velocity.

7. In a country with hyperinflation, the value of money

a. Is increasing over time.

b. Is decreasing quickly over time.

c. Is remaining constant.

d. May either be increasing or decreasing.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
When we speak of "government purchases" in calculating aggregate demand, we mean purchases by a. all levels of government local, state and federal b. local governments only c.
Response question: Return to the market failure you identified in week 2. What policy mechanism would be best to address it? Why would other mechanisms be inappropriate? Wou
Economists say that excess capacity in monopolistically competitive markets is "the cost to society of variety." What is the cost that economists are talking about, and why is
Can you think of an existing product that has been repositioned by finding a new market with a different need than the original product? Think of Croc's Shoes, for example. Th
Two manufacturers supply MRI systems for medical imaging. St. Jude’s Hospital wishes to replace its current MRI equipment that was purchased 8 years ago with the newer technol
Economists reason that the optimal decision is to continue any activity up to the point where the. Economics does not study correct or incorrect behaviors but rather it assume
Draw the supply and demand curve. What is the equilibrium price and equilibrium quantity? What is going to happen to the equilibrium price and equilibrium quantity if a draugh
Twenty-five years ago, coffee was a commodity product. Coffee brands such as Maxwell House (“good to the last drop”) and Folger’s advertised on television, but the difference