Exam 21: Quantity Theory, inflation, and the Demand for Money

In the liquidity trap,monetary policy ________.

Keynes argued that the precautionary component of the demand for money was primarily determined by the level of people's ________,which he believed were proportional to ________.

Because Keynes assumed that the expected return on money was zero,he argued that people would ________.

Budget deficits can be an important source of ________ monetary policy.

According to Keynes's theory of liquidity preference,velocity increases when ________.

Tobin's model of the speculative demand for money shows that people can reduce their ________ by ________ their asset holdings.

Keynes argued that the transactions component of the demand for money was primarily determined by the level of people's ________,which he believed were proportional to ________.

The classical economists' contention that prices double when the money supply doubles is predicated on the belief that in the short run velocity is ________ and real GDP is ________.

The Baumol-Tobin analysis suggests that ________.

Tobin's model of the speculative demand for money shows that people hold money as a ________ as a way of reducing ________.

Keynes's model of the demand for money suggests that velocity is ________ related to ________.

The velocity of money is ________.

________ quantity theory of money suggests that the demand for money is purely a function of income,and interest rates have no effect on the demand for money.

Which events created the perfect storm for the Canadian economy in 2007-2008?

The classical economists' conclusion that nominal income is determined by movements in the money supply rested on their belief that ________ could be treated as ________ in the short run.

The evidence on the interest sensitivity of the demand for money suggests that the demand for money is ________ to interest rates,and there is ________ evidence that a liquidity trap exists.

Keynes's liquidity preference theory indicates that the demand for money ________.

In the Baumol-Tobin model,as interest rates increase ________.

Examples of inflation hedges include ________.

If the demand for money is unstable then ________.