Exam 16: Monetary Theory and Policy

In an economy in which velocity is constant and real output grows at an average rate of 3 percent per year, a 5 percent average rate of growth in the money supply would result in a

An increase in the price level will

If the Fed expands the money supply, a short-run aggregate supply curve __________ would yield the largest short-run increase in the price level.

If money demand increases and the Fed does not alter its monetary policy, then

The equation of exchange is