Using the quantity theory of money, increases in the transactions demand for money when the money supply is fixed can only be satisfied by
a. increases in the velocity of money
b. decreases in the velocity of money
c. decreasing investment
d. accommodating the precautionary demand for money
e. reducing the price level
A
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In which of the following situations would the Fed conduct contractionary monetary policy?
A) The Fed is worried that deflation will become a problem. B) The Fed fears that unemployment is climbing above the natural rate. C) The Fed believes that aggregate demand was growing too slowly to keep up with potential GDP. D) The Fed is concerned that aggregate demand would continue to exceed the growth in potential GDP.
A given change in disposable income would have the greatest effect on aggregate demand with which of the following marginal propensities to consume?
a. 0.4 b. 0.6 c. 0.8 d. 0.2
According to the U.S. Bureau of Economic Analysis, by the third quarter of 2014, foreign investors had accumulated ________ of U.S. assets.
a. $30.8 billion b. $30.8 trillion c. $24.6 trillion d. $2.46 trillion
If the interest rate were 10 percent, how much would people be willing to pay for a stock that was certain to yield a $2 per share stream of net earnings continuously in the future?
a. $2 b. $10 c. $20 d. $100