Exam 17: Money Growth and Inflation: The Classical Theory of Inflation

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During the 1970's,U.S.inflation averaged 7% each year and real GDP increased.Holding velocity constant and using the quantity equation,we conclude that

(Multiple Choice)

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Question 21

The nominal interest rate is 6 percent and the inflation rate is 3 percent.What is the real interest rate?

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Question 22

According to the classical dichotomy,which of the following is influenced by monetary factors?

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Question 23

Figure 30-1 -Refer to Figure 30-1.If the current money supply is MS₁,then

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Question 24

If Y and V are constant and M doubles,the quantity equation implies that the price level

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Question 25

Suppose that monetary neutrality and the Fisher effect both hold.An increase in the money supply growth rate increases

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Question 26

Figure 30-2.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-2.If the relevant money-demand curve is the one labeled MD₁,then

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Question 27

Under the assumptions of the Fisher effect and monetary neutrality,if the money supply growth rate rises,then

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Question 28

An assistant manager at a restaurant gets a $100 a month raise.He figures that with his new monthly salary he cannot buy as many goods and services as he could buy last year.

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Question 29

Figure 30-1 -Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,

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Question 30

If M = 6,000,P = 3,and Y = 3,000,what is velocity?

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Question 31

When the money market is drawn with the value of money on the vertical axis,as the price level increases,the value of money

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Question 32

In 2010 the U.S.government was running a large deficit.Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit.If the Fed were to buy government bonds to help the government finance its expenditures,then

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Question 33

Most economists believe the principle of monetary neutrality is

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Question 34

If V and M are constant and Y doubles,the quantity equation implies that the price level

(Multiple Choice)

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Question 35

Figure 30-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-3.Which of the following events could explain a shift of the money-supply curve from MS₁ to MS₂?

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Question 36

If velocity and output were nearly constant,then

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Question 37

When the money market is drawn with the value of money on the vertical axis,if there is a shortage of money then

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Question 38

Suppose over some period of time the money supply tripled,velocity was unchanged,and real GDP doubled.According to the quantity equation the price level is now

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Question 39

When the money market is drawn with the value of money on the vertical axis,if the price level is below the equilibrium level,there is an

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Question 40

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Exam 17: Money Growth and Inflation: The Classical Theory of Inflation

During the 1970's,U.S.inflation averaged 7% each year and real GDP increased.Holding velocity constant and using the quantity equation,we conclude that

The nominal interest rate is 6 percent and the inflation rate is 3 percent.What is the real interest rate?

According to the classical dichotomy,which of the following is influenced by monetary factors?

Figure 30-1 -Refer to Figure 30-1.If the current money supply is MS1,then

If Y and V are constant and M doubles,the quantity equation implies that the price level

Suppose that monetary neutrality and the Fisher effect both hold.An increase in the money supply growth rate increases

Figure 30-2.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-2.If the relevant money-demand curve is the one labeled MD1,then

Under the assumptions of the Fisher effect and monetary neutrality,if the money supply growth rate rises,then

An assistant manager at a restaurant gets a $100 a month raise.He figures that with his new monthly salary he cannot buy as many goods and services as he could buy last year.

Figure 30-1 -Refer to Figure 30-1.When the money supply curve shifts from MS1 to MS2,

If M = 6,000,P = 3,and Y = 3,000,what is velocity?

When the money market is drawn with the value of money on the vertical axis,as the price level increases,the value of money

In 2010 the U.S.government was running a large deficit.Some were concerned that pressures might be put on the Federal Reserve to purchase government bonds to help the government finance this deficit.If the Fed were to buy government bonds to help the government finance its expenditures,then

Most economists believe the principle of monetary neutrality is

If V and M are constant and Y doubles,the quantity equation implies that the price level

Figure 30-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-3.Which of the following events could explain a shift of the money-supply curve from MS1 to MS2?

If velocity and output were nearly constant,then

When the money market is drawn with the value of money on the vertical axis,if there is a shortage of money then

Suppose over some period of time the money supply tripled,velocity was unchanged,and real GDP doubled.According to the quantity equation the price level is now

When the money market is drawn with the value of money on the vertical axis,if the price level is below the equilibrium level,there is an

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Figure 30-1 -Refer to Figure 30-1.If the current money supply is MS₁,then

Figure 30-2.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-2.If the relevant money-demand curve is the one labeled MD₁,then

Figure 30-1 -Refer to Figure 30-1.When the money supply curve shifts from MS₁ to MS₂,

Figure 30-3.On the graph,MS represents the money supply and MD represents money demand.The usual quantities are measured along the axes. -Refer to Figure 30-3.Which of the following events could explain a shift of the money-supply curve from MS₁ to MS₂?