On the basis of the equation of exchange, the policy makers of an economy predicted that an increase in money supply would result in an increase in real gross domestic product. This prediction was based on the assumption that:
a. there were no fluctuations in the interest rate
b. the velocity of money in the economy did not increase.
c. the nominal gross domestic product of the economy was constant.
d. the discount rate was fixed.
b
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The tools of Fed monetary policy, in order from most frequently to least frequently used, are
a. open market operations, discount rate changes, and legal reserve requirement changes b. open market operations, legal reserve requirement changes, and discount rate changes c. discount rate changes, legal reserve requirement changes, and open market operations d. legal reserve requirement changes, open market operations, and discount rate changes e. legal reserve requirement changes, discount rate changes, and open market operations
Over 50 percent of all U.S. workers now belong to unions
a. True b. False Indicate whether the statement is true or false
Special interest groups often engage in rent seeking, which is a socially wasteful activity
Indicate whether the statement is true or false
As interest rates rise, more and more investments become profitable for a firm.
Answer the following statement true (T) or false (F)