As monetarists view the equation of exchange:
A. V changes erratically and unpredictably.
B. V is quite stable.
C. V usually changes in the same direction of any given change in M.
D. V usually changes in the opposite direction of any given change in M.
B. V is quite stable.
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Stickiness of wages
A) is unrelated to stickiness of prices. B) reinforces stickiness of prices. C) lessens the stickiness of prices. D) may or may not reinforce stickiness of prices.
Everything else remaining unchanged, what will happen if the Fed sells government bonds in the open market and borrowed reserves is zero?
A) It will cause both the equilibrium federal funds rate and equilibrium quantity of reserves to fall. B) It will cause the equilibrium federal funds rate to fall, but no change in the equilibrium quantity of reserves. C) It will cause the equilibrium federal funds rate to rise, but no change in the equilibrium quantity of reserves. D) It will cause the equilibrium federal funds rate to rise and the equilibrium quantity of reserves to fall.