QUESTION 10
According to the quantity theory of money, if the money supply, M, increases by 10%, then
A. |
velocity increases by 10%. |
|
B. |
the rate of inflation (in %) increases by 10. |
|
C. |
the nominal GDP increases by 10%. |
|
D. |
none of the above. |
10 points
QUESTION 11
According to the quantity theory of money and the classical model, changes in nominal money supply, M, has
A. |
no effect on real variables. |
|
B. |
no effect on inflation rate. |
|
C. |
no effect on nominal interest rate. |
|
D. |
none of the above. |
10 points
QUESTION 12
If the nominal interest rate is 4% while the rate of inflation is 1%, then the real interest rate is
A. |
0%. |
|
B. |
1%. |
|
C. |
2%. |
|
D. |
none of the above. |
10 points
QUESTION 13
According to the quantity theory of money and the classical model, if money supply, M, increases by 1%, then
A. |
the real interest rate (in %) increases by 1. |
|
B. |
the inflation rate (in %) increases by 1. |
|
C. |
the nominal interest rate (in %) increases by 2. |
|
D. |
none of the above. |
10 points
QUESTION 14
The opportunity cost of holding money (demand for money) is
A. |
real interest rate. |
|
B. |
nominal interest rate. |
|
C. |
inflation rate. |
|
D. |
none of the above. |
the
QUESTION 10 According to the quantity theory of money, if the money supply, M, increases by...
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