When the Fed issues currency
A. this increases our money supply only if it replaces old, worn-out currency.
B. this increases our money supply only if it is used to accommodate the public's desire to hold more currency.
C. this increases our money supply either if it replaces old, worn currency, or if it is used to accommodate the public's desire to hold more currency.
D. this does not increase our money supply.
D. this does not increase our money supply.
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Rational expectations theory implies that the more completely the effects of policy makers are foreseen, the smaller their short run effects on real output and unemployment, and the greater their short run effects on the price level
a. True b. False Indicate whether the statement is true or false
A firm engaging in group price discrimination
A) divides customers into groups and then charges each customer within each group a different price, similar to perfect price discrimination. B) divides customers into groups and then charges each group a different price. C) bundles products into groups and sells the groups at different prices. D) finds the average reservation price for a group of customers and sell its goods at that price.
In the long run, changes in the money supply affect only the price level because
a. the aggregate demand curve is vertical. b. the aggregate demand curve is downward sloping. c. the long-run aggregate supply curve is vertical. d. the long-run aggregate supply curve is upward sloping. e. current real GDP is less than the economy's potential GDP.
All other things unchanged, the velocity of money will
A) increase if the quantity of money demanded decreases. B) increase if the quantity of money demanded increases. C) decrease if the quantity of money demanded decreases. D) fall to zero if the quantity of money demanded increases.