Exam 19: Quantity Theory, inflation and the Demand for Money

Of the three motives for holding money suggested by Keynes,which did he believe to be the most sensitive to interest rates?

If the money supply is $600 and nominal income is $3,600,the velocity of money is

If initially the money supply is $2 trillion,velocity is 5,the price level is 2,and real GDP is $5 trillion,a fall in the money supply to $1 trillion

The quantity theory of inflation indicates that if the aggregate output is growing at 3% per year and the growth rate of money is 5%,then inflation is

If the government finances its spending by selling bonds to the central bank,the monetary base will ________ and the money supply will ________.

The portfolio theories of money demand state that the demand for real money balances is ________ related to income and ________ related to the nominal interest rate.

If people expect nominal interest rates to be higher in the future,the expected return to bonds ________,and the demand for money ________.

The quantity theory of money is a theory of how

If the money supply is $20 trillion and velocity is 2,then nominal GDP is

Fisher's quantity theory of money suggests that the demand for money is purely a function of ________,and ________ no effect on the demand for money.

The Keynesian theory of money demand predicts that people will increase their money holdings if they believe that

________ quantity theory of money suggests that the demand for money is purely a function of income,and interest rates have no effect on the demand for money.

The speculative motive for holding money is closely tied to what function of money?

Because the quantity theory of money tells us how much money is held for a given amount of aggregate income,it is also a theory of

The classical economists' contention that prices double when the money supply doubles is predicated on the belief that in the short run velocity is ________ and real GDP is ________.

Keynes's model of the demand for money suggests that velocity is ________ related to ________.

The Baumol-Tobin analysis suggests that a decrease in the brokerage fee for buying and selling bonds will cause the demand for money to ________ and the demand for bonds to ________.

Keynes hypothesized that the transactions component of money demand was primarily determined by the level of

According to the quantity theory of money demand,

The Baumol-Tobin analysis suggests that an increase in the brokerage fee for buying and selling bonds will cause the demand for money to ________ and the demand for bonds to ________.