The quantity theory of money assumes that the velocity of money:
A. is constant.
B. will rise if the money supply rises and fall if the money supply falls.
C. will rise if the money supply rises, but it will not change if the money supply falls.
D. will fall if the money supply rises, and it will rise if the money supply falls.
Answer: A
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When aggregate planned expenditure ________ real GDP, there are unplanned ________ in inventories, and firms ________ production, therefore decreasing real GDP
A) exceeds; decreases; decrease B) exceeds; increases; increase C) is less than; increases; decrease D) is less than; increases; increase E) is less than; decreases; decrease
According to the economic way of thinking, elected government officials tend to favor
A) contractionary monetary policies. B) contractionary fiscal policies. C) expansionary monetary and fiscal policies. D) monetary and fiscal policies consistent with the public interest.
Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bob?
a. 10 toys b. 8 toys c. 16 toys d. 12 toys e. 4 toys
A bank's net worth is:
a. equal to assets plus liabilities
b. sometimes called the owners' equity.
c. equal to assets minus reserves.
d. the same thing as net profits.
e. the amount of interest charged by the bank for short-term loans.