Which of the following is TRUE regarding the quantity theory of money?
I. The theory predicts that in the long run the inflation rate equals the money growth rate minus the growth rate of real GDP.
II. The theory predicts that countries with high growth rates of money will have high inflation rates.
III. The theory predicts that increases in the growth rate of velocity lowers the inflation rate.
A) I and II
B) II and III
C) I and III
D) I, II and III
A
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A decrease in the interest rate could have been caused by the money-demand curve shifting
a) leftward because the price level fall. b) leftward because the price level rose. c) rightward because the price level fell. d) rightward because the price level rose.
If a series of severe storms in the Atlantic Ocean drastically significantly disrupted the transatlantic slave trade, which would most accurately describe the market for slaves in colonial America?
a. The price of slaves would increase and the quantity of slaves would decrease. b. The price and quantity of slaves would increase. c. The price and quantity of slaves would decrease. d. The price of slaves would decrease and the quantity of slaves would increase.