Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases
a. the inflation rate and the nominal interest rate by the same number of percentage points.
b. nominal interest rates but by less than the percentage point increase in the inflation rate.
c. the inflation rate but not the nominal interest.
d. neither the inflation rate nor the nominal interest rate.
a
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Answer the next question based on the following data. All figures are in billions of dollars.Gross investment$18Net exports2Residential fixed investment5Inventory investment3Net investment13Consumption (depreciation) of fixed capital is ________.
A. $5 B. $15 C. $13 D. $16
If a stock's dividend is expected to grow at a constant rate of 4 percent in the future
and it has just paid a dividend of $6.00 per share, and you have an alternative investment of equal risk that will earn a 7 percent rate of return, what would you be willing to pay per share for this stock? A) $6.66 B) $54.55 C) $200.00 D) $208.00
If the correlation between GDP and y is 0, we say y is
A) procyclical. B) acyclical. C) countercyclical. D) tricyclical.
The Granger Causality Test
A) uses the F-statistic to test the hypothesis that certain regressors have no predictive content for the dependent variable beyond that contained in the other regressors. B) establishes the direction of causality (as used in common parlance) between X and Y in addition to correlation. C) is a rather complicated test for statistical independence. D) is a special case of the Augmented Dickey-Fuller test.