Exam 22: Quantity Theory, inflation and the Demand for Money

In the Baumol-Tobin analysis of transactions demand for money,either an increase in ________ or a decrease in ________ increases money demand.

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

Keynes's model of the demand for money suggests that velocity is

For the classical economists,the quantity theory of money provided an explanation of movements in the price level.Changes in the price level result

The financing of government spending by issuing debt

If the money supply is $500 and nominal income is $3,000,the velocity of money is

In the liquidity trap,monetary policy

If there are economies of scale in the transactions demand for money,as income increases,money demand

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

Because interest rates have substantial fluctuations,the ________ theory of the demand for money indicates that velocity has substantial fluctuations as well.

Tobin's model of the speculative demand for money improves on Keynes's analysis by showing that

If nominal GDP is $8 trillion,and the money supply is $2 trillion,velocity is

In the Baumol-Tobin analysis of the demand for money,either an increase in ________ or an increase in ________ increases money demand.

Keynes hypothesized that the precautionary component of money demand was primarily determined by the level of

The velocity of money is

Irving Fisher's view that velocity is fairly constant in the short run transforms the equation of exchange into the

If nominal GDP is $10 trillion,and velocity is 10,the money supply is

Keynes argued that when interest rates were low relative to some normal value,people would expect bond prices to ________ so the quantity of money demanded would ________.

In the liquidity trap,the money demand curve

In the equation of exchange,the concept that provides the link between M and PY is called