When the Fed conducts expansionary monetary policy, lower short-term interest rates will tend to stimulate the economy. How will the change in the velocity of money affect this result?
a. Velocity will decline, enhancing the stimulus effect.
b. Velocity will increase, somewhat dampening the stimulus effect.
c. Velocity will increase, enhancing the stimulus effect.
d. Velocity will decline, somewhat dampening the stimulus effect.
D
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Direct controls are considered inefficient because all firms are forced to pay the same costs.
Answer the following statement true (T) or false (F)
Total revenue can be defined as:
A. the amount that a firm receives from the sale of goods and services. B. the amount that a firm spends on all inputs that go into making a good or service. C. the total amount a firm spends on all inputs used in production. D. the total number of sales of a good or service by a firm.
An important difference between the GDP deflator and the consumer price index is that
a. the GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by consumers. b. the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers. c. the GDP deflator reflects the prices of all final goods and services produced by a nation's citizens, whereas the consumer price index reflects the prices of all final goods and services bought by consumers. d. the GDP deflator reflects the prices of all final goods and services bought by producers and consumers, whereas the consumer price index reflects the prices of all final goods and services bought by consumers.
A decrease in wages payable during the accounting period represents a decrease in cash.
a. true b. false