In the classical model with an open economy, an increase in government purchases always causes complete crowding out

The velocity of M2 is equal to

A) M3 minus M1. B) GDP divided by M2. C) GDP multiplied by M2. D) the velocity of M1.

If a good is considered a normal good, the demand curve will shift ________ when income increases because ________

A) right; the income and substitution effects move in the same direction. B) right; the income and substitution effects move in the opposite direction. C) left; the income and substitution effects move in the same direction. D) left; the income and substitution effects move in the opposite direction.