Using the equation of exchange, if inflation is 1%, the velocity of money grows by 1.0% and the growth rate of money is 3.0%; what is real growth?

You decide that it is time to buy a big family car. The opportunity cost you consider is:

a. the cost of the car. b. the increase in comfort for your family while traveling. c. the return this money would have earned if it was invested otherwise. d. the inconvenience you and your family are bearing on account of your old car.

If the Federal Reserve wants to increase the availability of money and credit, it can

a. lower the discount rate. b. raise the reserve requirements. c. sell government bonds to the public. d. encourage banks to increase their prime lending rate.