The equation of exchange becomes the same as the quantity theory of money by assuming that the velocity of circulation ________ when the quantity of money changes and potential GDP ________ when the quantity of money changes
A) changes; changes
B) changes; does not change
C) does not change; changes
D) does not change; does not change
D
You might also like to view...
If the government collects taxes to pay for expenditures of an equal amount, bank reserves
A) are unaffected. B) rise by an equal amount. C) rise by a multiple amount. D) fall by an equal amount.
Once wartime spending is under way and production is diverted away from household consumption items and private investment goods,
(a) real Gross National Product will likely fall. (b) the money supply will automatically increase. (c) inflation will likely rear its ugly head if productivity does not advance. (d) production and employment will fall.
With regard to preventing entry, if identical firms act simultaneously
A) they cannot credibly threaten each other. B) they will all incur losses. C) only one firm will enter the market. D) none of them will enter the market.
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually
A) positive. B) strictly linear. C) flat. D) negative. E) chaotic.