Suppose that the Fed decides to decrease the money supply by 0.87 percent. If the velocity of money is constant, then the quantity theory of money predicts that:
a. nominal GDP will remain unchanged.
b. the quantity of output will rise by 0.87 percent.
c. nominal GDP will fall by 0.87 percent.
d. the price level will fall by 0.87 percent.
e. real GDP will fall by 0.87 percent.
c
Economics
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The FHLBS gives loans to S&Ls and thus performs a function similar to the ________ for commercial banks
A) Federal Reserve B) U.S. Treasury C) Office of the Comptroller of the Currency D) U.S. Mint
Economics
Any combination of goods lying outside of the budget line:
A. implies that the consumer is not spending all his income. B. yields less utility than any point on the budget line. C. yields less utility than any point inside the budget line. D. is unattainable, given the consumer's income.
Economics