using the equation of exchange and assumptions underlying the
niave quanity thoery of money explain the...
using the equation of exchange and assumptions underlying the
niave quanity thoery of money explain the long runpositive
relationship between growth rate in the mony supply and inflation
that we see across countries.
What are the underlying assumptions of the Monetarist model and
the Mundell-Fleming model? Using graphical analysis, contrast the
differences in policy implications for these models.
Which of the following is TRUE regarding the quantity theory of
money (equation of exchange)?
The theory predicts that in the long run the inflation rate
equals the money growth rate minus the growth rate of real
GDP.
The theory predicts that countries with high growth rates of
money will have high inflation rates.
The theory predicts that if the growth rates of real GDP are
higher than the money growth rates while the velocity rates are
constant, countries will...
From the equation of exchange, we know that a change in the
money supply changes nominal GDP when we assume that
money velocity stays the same.
price level stays the same.
real GDP stays the same.
None of the above is correct.
Automatic stabilizers are key elements of
neither monetary nor fiscal policies.
both monetary and fiscal policies.
fiscal policies.
monetary policies.
State and local tax receipts are dominated by
personal income taxes and payroll taxes.
social Security and self-employment...
Define the Cambridge money demand function and Fisher’s income
version of the equation of exchange. In classical thinking, what
crucial assumption leads to the conclusion that the money stock
determines the price level?
Discuss the features of the IS-LM-FE model and explain how the
model’s assumptions on the exchange rate and the sensitivity of
international capital flows to interest rate differentials affect
the slopes and the positions of the IS, LM and FE curves.