If the growth rate of velocity changes:
A. the growth rate of the money supply must change in the same direction.
B. the growth rate of the money supply must change in the other direction.
C. the growth rate of C, I, G, or NX must change.
D. the growth rates of C, I, G, and NX must all change.
Ans: C. the growth rate of C, I, G, or NX must change.
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When the Fed buys securities from the public, banks' reserves ________ and the quantity of money ________
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases E) do not change; increases
The proposition that the amount of goods and services produced in an economy in the long run is not affected by the price level is known as the ________
A) neutrality of money B) classical dichotomy C) quantity theory of money D) Fisher effect E) none of the above