The quantity theory of money implies that:
A) inflation is equal to the gap between the growth rate of money supply and the current real interest rates.
B) inflation is equal to the gap between the growth rate of money supply and the growth rate of nominal GDP.
C) inflation is equal to the gap between the growth rate of money supply and the current nominal interest rates.
D) inflation is equal to the gap between the growth rate of money supply and the growth rate of real GDP.
D
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How has growth in M2 minus the growth in real GDP compared to the inflation rate in the United States?
What will be an ideal response?
A sudden technological breakthrough in an economy would:
a. have no impact on real GDP. b. cause aggregate demand to fall. c. lower the natural rate of unemployment. d. increase the price level. e. cause aggregate supply to rise.
The liquidity of an asset refers to the ability of the asset to be converted into cash.
Answer the following statement true (T) or false (F)
If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by a(an):
A. increase in the supply of the good. B. increase in the demand for the good. C. decrease in the demand for the good. D. decrease in the supply of the good.