The largest item on the asset side of the Federal Reserve balance sheet is

A true cost-of-living adjustment in response to a change in prices would compensate consumers so that they would be able to

A) purchase the same bundle they purchased before prices changed. B) achieve the same level of utility they did before prices changed. C) face the same choices they did before prices changed. D) achieve an increase in utility that is equal to the rate of inflation.

Suppose that C = $700, I = $200, G = $200, NX = $100, and that the money supply is equal to $400. Based upon these assumptions, velocity is equal to ________________. If consumption and velocity both rise beyond their initial levels, then it follows that another component of spending ___________ necessarily fall

A) 3; must B) 3; does not C) 4; must D) 4; does not