ECON 2100 chapter 17 with
complete verified solutions
The classical principle of monetary neutrality states that changes in the
money supply do not influence ________ variables, and it is thought to be
most applicable in the ________ run.
a. nominal; long
b. real; long
c. nominal; short
d. real; short - answer b. real; long
If nominal GDP is $400, real GDP is $200, and the money supply is $100,
then __________.
a. the price level is ½, and velocity is 4
b. the price level is 2, and velocity is 2
c. the price level is 2, and velocity is 4
d. the price level is ½, and velocity is 2 - answer c. the price level is 2, and
velocity is 4
According to the quantity theory of money, which variable in the quantity
equation is most stable over long periods of time?
a. Price level
b. Velocity
c. Output
d. Money - answer b. Velocity
complete verified solutions
The classical principle of monetary neutrality states that changes in the
money supply do not influence ________ variables, and it is thought to be
most applicable in the ________ run.
a. nominal; long
b. real; long
c. nominal; short
d. real; short - answer b. real; long
If nominal GDP is $400, real GDP is $200, and the money supply is $100,
then __________.
a. the price level is ½, and velocity is 4
b. the price level is 2, and velocity is 2
c. the price level is 2, and velocity is 4
d. the price level is ½, and velocity is 2 - answer c. the price level is 2, and
velocity is 4
According to the quantity theory of money, which variable in the quantity
equation is most stable over long periods of time?
a. Price level
b. Velocity
c. Output
d. Money - answer b. Velocity
