Other things constant, the quantity theory of money concludes that any increase in the quantity of money
A) decreases the demand for money.
B) decreases in the aggregate price level.
C) decreases the aggregate level of nominal income.
D) proportionally increases the price level.
D
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Which of the following statements is true if interest rates were zero?
A) The demand for bonds increases because bonds will be a more attractive alternative to money. B) People will hold their wealth in the form of money rather than in bonds. C) Bonds and money will become perfect substitutes since both are non-interest earning assets. D) The supply of bonds will increase.
In the short run, the price level
a. will decrease if unit costs and markups both increase throughout the economy b. will remain stable if unit costs increase throughout the economy c. is unimportant in macroeconomics d. will increase if unit costs increase throughout the economy e. is determined by the Fed