The money supply is determined
a. only by the Fed.
b. by the Fed and banks.
c. by the Fed, banks, and the public.
d. by congress.
e. by the President.
C
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If nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be
A) greater than 100. B) less than 100. C) equal to 100. D) less than 0.
If interest rates rise, then velocity should ____ in the Keynesian model and _____ in the Monetarist model
a. rise; fall. b. stay the same, stay the same. c. rise, stay the same. d. fall; rise. e. none of the above
When Fed policy is being used to offset a contractionary gap, which of the following variables decreases as a result? a. Aggregate demand
b. Investment. c. Net Exports. d. None of the above variables decreases as a result of Fed policy to offset a contractionary gap..
Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
A. always lead to the most efficient allocation of resources. B. often lead to increasing inequality. C. often lead to the most efficient allocation of resources. D. always lead an economy to ruin.