Suppose households attempt to increase their money holdings. To stabilize output by countering this increase in money demand, the Federal Reserve would
a. increase government spending.
b. increase the money supply.
c. decrease government spending.
d. decrease the money supply.
b
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The short run is a time period such that: a. the existing firms in the industry do not have sufficient time to adjust the quantity of any inputs which they employ. b. the existing firms in the industry do not have sufficient time to adjust their current rate of output
c. new entrants have sufficient time to build factories and enter the industry. d. the existing firms in the market do not have sufficient time to increase the size of their existing plants or build new factories.
The crude quantity theory is based on each of these assumptions except that
A. if M rises by a certain percentage, P rises by that same percentage. B. V and Q are constants. C. MV = PQ. D. if M rises by a certain percentage, V will rise by that same percentage.