Exam 22: Money Growth and Inflation

In the long run, money demand and money supply determine

According to the classical dichotomy, when the money supply doubles which of the following doubles?

When money is neutral, which of the following increases when the money supply growth rate increases?

Kaitlyn purchased one share of Northwest Energy stock for $200; one year later she sold that share for $400. The inflation rate over the year was 50 percent. The tax rate on nominal capital gains is 50 percent. What was the tax on Kaitlyn's capital gain?

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

Based on the quantity equation, if Y = 3,000, P = 3, and V = 4, then M =

Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money, and the price level if: a. the Fed increases the money supply. b. people decide to demand less money at each value of money.

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

If inflation is lower than what was expected,

Identify each of the following as nominal or real variables. a. the physical output of goods and services b. the overall price level c. the dollar price of apples d. the price of apples relative to the price of oranges e. the unemployment rate f. the amount that shows up on your paycheck after taxes g. the amount of goods you can purchase with the wage you get each hour h. the taxes that you pay the government d. the price of apples relative to the price of oranges e. the unemployment rate

In which case is velocity the highest?

With the value of money on the vertical axis, the money supply curve is

Hyperinflation is generally defined as inflation that exceeds 50 percent per month.

The supply of money increases when

The increase in the overall level of prices is known as ______.

Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold. What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?

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

There is evidence that the rate at which money changed hands rose during the German hyperinflation. This means that

The country of Robinya has a tax system identical to that of the United States. Suppose someone in Robinya bought a parcel of land for 10,000 deera the local currency) in 1970 when the price index equaled 100. In 2010, the person sold the land for 100,000 deera, and the price index equaled 500. The tax rate on nominal capital gains was 20 percent. Compute the taxes the person paid on the nominal gain and the change in the real value of the land in terms of 2010 prices to find the after-tax real rate of capital gain.

Studies have found which of the following economic terms mentioned most often in U.S. newspapers?