Exam 14: Money and the Economy

If the money supply is $6,000,velocity is 5,and Real GDP is 10,000 units of output,then the price level is _____________.If the money supply doubled over a short time period to $12,000,the simple quantity theory of money would predict that _____________________.

In the equation of exchange,"PQ" stands for

If Real GDP is $8,000,the money supply is $4,000,and the price level is 3,then velocity is

Explain in detail how the California gold rush contributed to rising prices in the early 1850's.

The aggregate supply curve in the short run is vertical in __________ version of the AD-AS framework.

Exhibit 14-1 -Refer to Exhibit 14-1.Starting from point A,a one shot,supply-side-induced inflation raises the price level in the economy to P₂.Assuming no other changes,in the long run the economy is likely to settle at point

The liquidity effect is the

"The money supply multiplied by velocity must equal GDP" is a statement of the

Exhibit 14-1 -Refer to Exhibit 14-1.Starting from point A,a one-shot,demand-side-induced inflation raises the price level in the economy to P?.Assuming no other changes,in the long run the economy is likely to settle at point

Describe the expectations (or Fisher)effect.

When a country imposes and maintains price controls,inflation

Monetarists believe that

The California gold rush resulted in an increase in the amount of money in circulation and an increase in prices across the country.

The income effect is the

In the monetarist version of the AD-AS framework,starting from long-run equilibrium,an increase in the money supply produces

Monetarists believe

When Milton Friedman said that inflation is always and everywhere a monetary phenomenon,he was referring to

Which of the following factors can change continually in such a way as to bring about continued increases in aggregate demand?

Exhibit 14-1 -Refer to Exhibit 14-1.What sequence of points shows the short- and long-run consequences of a fall in the money supply under monetarist assumptions?

In the monetarist version of the AD-AS framework,a decrease in velocity produces a __________ shift of the __________ curve.