1. When the money sector is drawn through the worth of money on the vertical axis, if the price level is below the equilibrium level, tright here is ana. excess demand also for money, so the price level will rise.b. excess demand also for money, so the price level will certainly fall.c. excess supply of money, so the price level will climb.d. excess supply of money, so the price level will certainly loss.

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1. Last year, you earned a nominal wage of $10 per hour and the price level was 120. This year your nominal wage is $11 per hour, yet you are unable to purchase the same amount of goods as last year. The price level this year must bea. 135 b. 132 c. 125 d. 121
1. Which of the following is correct?a. If the Fed purchases bonds in the open industry, then the money supply curve shifts best. A adjust in the price level does not transition the money supply curve.b. If the Fed sells bonds in the open market, then the money supply curve shifts right. A change in the price level does not change the money supply curve.c. If the Fed purchases bonds, then the money supply curve shifts right. An increase in the price level shifts the money supply curve appropriate.d. If the Fed sells bonds, then the money supply curve shifts best. A decrease in the price level shifts the money supply curve best.
1. Monetary neutrality implies that a change in the money supplya. does not readjust genuine variables. Most economists think this is a good description of the economic situation in the short run and in the lengthy run.b. does not adjust genuine variables. Most financial experts think this is an excellent description of the economic climate in the long run yet not the brief run.c. does not readjust nominal variables. Many economic experts think this is a good description of the economic climate in the short-run and also the lengthy run.d. does not readjust nominal variables. Many financial experts think this is a good summary of the economy in the lengthy run however not the brief run.
1. The money supply in Muckland also is $100 billion. Nominal GDP is $800 billion and actual GDP is $200 billion. What are the price level and velocity in Muckland?a. The price level and velocity are both 8. C. The price level is 2 and also velocity is 8.b. The price level and also velocity are both 4. D. The price level is 4 and velocity is 8.
1. Suppose financial neutrality holds and velocity is continuous. A 4 percent rise in the money supplya. increases the price level by more than 4%. c. boosts the price level by 4%.b. boosts the price level by less than 4%. d. rises actual GDP by 4%.
1. Suppose the USA all of a sudden decided to pay off its debt by printing brand-new money. Which of the complying with would happen?a. People that hosted money would feel poorer. C. Prices would certainly rise.b. People that had actually lent money at a addressed interemainder price would feel poorer. D. All are correct.

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1. Norma receives a rise in her nominal earnings. She complains that the present inflation rate of 6 percent erodes the actual purchasing power of her extra nominal revenue. This is truea. only if the increase in her nominal earnings is less than 6 percent.b. just if the boost in her nominal income is more than six percent.c. since inflation constantly reduces purchasing power.d. just if her actual revenue increases.
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