In the late 1970s into the early 1980s, interest rates were high and very volatile. During this period:
A. money demand as well as velocity should have also been shifting and volatile.
B. the Fed was actually targeting the short-term interest rate.
C. the velocity of money should have been stable.
D. it should have been easy for the Fed to predict the velocity of money.
Answer: A
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a. some resources are variable and some resources are fixed. b. all the resources can be varied. c. all resources are fixed. d. at least one resource is fixed. e. there are no explicit costs.
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