Suppose that monetary neutrality and the Fisher effect both hold and the money supply growth rate has been the same for a long time. Other things the same a higher money supply growth would be associated with
a. both higher inflation and higher nominal interest rates.
b. a higher inflation rate, but not higher nominal interest rates.
c. a higher nominal interest rate, but not higher inflation.
d. neither a higher inflation rate nor a higher nominal interest rate.
a
Economics
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Suppose you withdraw $1,000 from your savings account and put it in your checking account. Briefly explain how this will affect M1 and M2
What will be an ideal response?
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The Phillips curve shows that when the unemployment rate is higher than the natural rate,
A) inflation is higher than expected. B) inflation is lower than expected. C) policy rate is higher than expected. D) policy rate is lower than expected.
Economics