Exam 15: Monetary Theory and Policy.

If the velocity of money is 5 and nominal GDP is $50 trillion, then money supply is _____

Which of the following is true of the equation of exchange?

During the 2007-2009 financial crisis, the Federal Reserve took some unusual steps in its conduct of monetary policy. Which of the following was not one of them?

In an economy in which velocity is constant and the same level of real output is produced year after year, a slow increase in the money supply would result in a _____

Which of the following changes will shift the money demand curve leftward?

An expansionary monetary policy is always capable of boosting aggregate investment.

If the velocity of money is 2 and nominal GDP is $200 trillion, then money supply is _____

Which one of these statements is correct?

Which of the following statements about the velocity of money in the United States is correct?

When calculating the extent to which changes in the money supply will change nominal GDP, we use the money multiplier instead of the spending multiplier.

If the Fed increases the money supply, then _____

The higher the interest rate, the greater the preference for liquidity.

In the long run, a change in the money supply does not affect the natural rate of unemployment because _____

When the Fed adopts an expansionary monetary policy, _____

A decrease in the money supply in the short run will cause an increase in planned investment spending.

The velocity of money in circulation measures _____

The supply of money is depicted as an upward-sloping line that depends directly on the interest rate.

The quantity theory of money states that if the velocity of money is stable or at least predictable, then _____

The quantity theory of money states that increases in the money supply result in proportional increases in real GDP.

The quantity theory of money assumes that money supply and price level are the only variables in the equation of exchange that are free to fluctuate.