When the Fed increases the money supply, interest rates
a. rise, causing velocity to fall.
b. fall, causing velocity to fall.
c. rise, causing velocity to rise.
d. fall, causing velocity to rise.
b
You might also like to view...
Advances in computing power is an example of:
A) labor-saving technological changes. B) skill-biased technological changes. C) unskilled-biased technological changes. D) labor-complementary technological changes.
Refer to Figure 12-16. Which panel best represents the perfectly competitive organic produce market in which some firms are experiencing short-run losses, and consumers are displaying an increased preference for organic produce?
A) Panel A B) Panel B C) Panel C D) Panel D
When an economy is in long run equilibrium,
a. it will be impossible to sustain the current rate of output in the future. b. the interest rate will decline. c. the foreign exchange value of the dollar will tend to appreciate. d. the actual and natural rates of unemployment will be equal.
In the long run, the position of the short-run aggregate supply curve determines:
A. both output and the price level. B. neither output nor the price level. C. output. D. the price level.