If the demand for money is relatively stable,
A) the velocity of money will be constant.
B) the velocity of money will grow at a steady and predictable rate.
C) a fixed growth rate for the nominal money supply will lead to a stable growth rate of nominal GDP.
D) B and C are both correct.
D
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With increasing returns (falling average costs), as the remaining firms expand, their demand curves become _______________ due to foreign competition, and firms must _______________.
a. steeper; raise prices b. flatter; lower prices c. flatter; raise prices d. steeper; lower prices
If the Fed chooses to sell bonds on the open market, it is attempting to:
a) lower interest rates using expansionary monetary policy. b) lower interest rates using contractionary monetary policy. c) raise interest rates using expansionary monetary policy. d) raise interest rates using contractionary monetary policy.