Suppose the velocity of money is not fixed, but stable at about 4% growth per year
How could the quantity theory of money be modified to include a stable growth rate of the velocity of money? In this modified version with velocity growing at about 4% per year, what would the growth rate of the other variables need to be to cause inflation?
The quantity theory of money would have to include a growth rate for the velocity of money of about 4% instead of 0%. The inflation rate would then be determined by the following equation:
Inflation rate = Growth rate of the money supply + Growth rate of the velocity of money - Growth rate of real GDP.
Inflation would occur if the growth rate of the money supply plus the 4% growth rate of the velocity of money exceeds the growth rate of real GDP. Therefore, the growth rate of the money supply must be 4 percentage points less than the growth rate of real GDP or inflation will occur.
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Suppose the Bank of China permanently decreases its purchases of U.S. government bonds and, instead, holds more dollars on deposit at the Federal Reserve
Everything else held constant, a open market ________ would be the appropriate monetary policy action for the Fed to take to offset the expected ________ in the monetary base in the United States. A) purchase; decrease B) purchase; increase C) sale; decrease D) sale; increase
Demand curves are negatively sloped when people buy:
a. less as the price decreases. b. more as the price increases. c. the same amount as the price changes. d. more as the price decreases. e. less as incomes decrease.
Refer to the following computer output from estimating the parameters of the nonlinear modelY = aRbScTdThe computer output from the regression analysis is: 
Based on the info above, the estimated value of a is
A. -0.6931 B. 2.66 C. 0.50 D. -3.67
The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to:
A. increase by approximately 12 percent. B. decrease by approximately 12 percent. C. decrease by approximately 32 percent. D. decrease by approximately 26 percent.