Which of the following is true when the velocity of money falls?
a) an increase in the money supply will have less effect on nominal gross national product
b) a change in the money supply will affect output only
c) the fed will decrease the money supply
d) output will be greater for a given money supply
e) the public will increase its holdings of assets other than money
Ans: a) an increase in the money supply will have less effect on nominal gross national product
You might also like to view...
The supply of loanable funds is the relationship between loanable funds and ________ other things remaining the same
A) real GDP B) the price level C) the real interest rate D) the inflation rate
Suppose the central bank implements a monetary contraction that is fully expected by financial market participants. Given this information, we would expect
A) stock prices to rise. B) stock prices to fall. C) stock prices to remain unchanged. D) an ambiguous effect on stock prices. E) stock prices to fall and the interest rate to rise.