An increase in the expected inflation rate causes:
a. the velocity of money to increase.
b. the velocity of money to decrease.
c. the actual inflation rate to fall

Suppose the economy of Catalania is experiencing a recession and policy makers decide to implement an expansionary monetary policy. After the implementation of the policy, there is a considerable time gap before the effect of the policy on the major economic variables is noticed. This is an example of: a. the neutrality of money. b. an inflationary gap

c. an administrative lag. d. an operational lag.

Money is critical in facilitating market exchanges and the specialization that these exchanges permit.

Answer the following statement true (T) or false (F)