If the Fed's monetary policy causes a substantial decrease in interest rates, what is the most likely impact on velocity?
a. It will decrease.
b. It will increase.
c. It will remain constant.
d. Velocity is unrelated to interest rates.
a
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Empirical evidence reveals a(n) __________ relationship between money and stock prices
A) positive and consistent B) negative and consistent C) completely independent D) inconsistent
Explain how changes in corporate taxes affect the investment decisions of firms
What will be an ideal response?
It is possible to observe a positive nominal interest rate together with a negative real interest rate
a. True b. False Indicate whether the statement is true or false