Multiple Choice
Stephen Goldfeld's estimate of the demand for money failed to predict the actual level of M1 demanded in the years after 1973 because
A) nominal interest rates fell to very low levels during those years.
B) financial innovation produced substitutes for checkable deposits.
C) the economy suffered through several recessions.
D) the Fed unexpectedly decided to decrease the rate of growth of M1.
Correct Answer:
Verified
Correct Answer:
Verified
Q2: According to Milton Friedman, permanent income is<br>A)income
Q3: The inclusion in M1 of interest-bearing substitutes
Q4: People's decision to hold money based on
Q5: According to Friedman, the opportunity cost of
Q6: The liquidity preference theory emphasizes<br>A)the transactions motive
Q8: Keynes assumed that the expected return on
Q9: Why do economists and policy-makers view fluctuations
Q10: Fluctuations in velocity indicate that<br>A)changes in money
Q11: Which of the following is NOT considered
Q12: From 1959 to 1989, M2 velocity<br>A)declined sharply.<br>B)increased