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Questions and Answers
What happens to the value of money when there is an increase in the money supply?
What happens to the value of money when there is an increase in the money supply?
- It remains unchanged
- It is inversely related to the price level
- It increases
- It decreases (correct)
What happens to the price level when there is an increase in the money supply?
What happens to the price level when there is an increase in the money supply?
- It is directly related to money demand
- It increases (correct)
- It remains unchanged
- It decreases
What does the quantity equation (Mï‚´V=Pï‚´Y) relate the quantity of money (M) to?
What does the quantity equation (Mï‚´V=Pï‚´Y) relate the quantity of money (M) to?
- Nominal value of output (P ï‚´ Y) (correct)
- Nominal interest rates
- Real GDP
- Unemployment rate
What does the velocity of money refer to?
What does the velocity of money refer to?
What is one of the individual costs of unemployment mentioned in the text?
What is one of the individual costs of unemployment mentioned in the text?
How does unemployment impact economic activity according to the text?
How does unemployment impact economic activity according to the text?
What is one of the social costs of unemployment mentioned in the text?
What is one of the social costs of unemployment mentioned in the text?
What is one effect of the reverse multiplier effect mentioned in the text?
What is one effect of the reverse multiplier effect mentioned in the text?
What is one consequence of inflation according to the text?
What is one consequence of inflation according to the text?
How does inflation affect the tax burden on capital gains?
How does inflation affect the tax burden on capital gains?
What is a consequence of central bank-induced inflation according to the text?
What is a consequence of central bank-induced inflation according to the text?
What is a unique cost of unexpected inflation highlighted in the text?
What is a unique cost of unexpected inflation highlighted in the text?
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