One assumption that changes the equation of exchange into the quantity theory of money is:
A. real output varies with the money supply.
B. velocity remains constant.
C. price times quantity equals nominal output.
D. expectations change with inflation.
Answer: B
Economics
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In the figure above, the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve. If there is no Ricardo-Barro effect, the figure shows a situation in which the government has a budget
A) deficit of $1 trillion. B) deficit of $1.5 trillion. C) surplus of $0.5 trillion. D) deficit of $0.5 trillion. E) surplus of $1 trillion.
Economics
Well-functioning financial markets
A) cause inflation. B) eliminate the need for indirect finance. C) cause financial crises. D) allow the economy to operate more efficiently.
Economics