6. According to the transaction demand for money, the real money demand function is

Select one:

A.positively dependent on the real GDP.

B.

inversely related to the real GDP.

C.

positively dependent on the nominal interest rate.

D.

inversely related to the nominal interest rate.

7If the money demand function is given by (M/P)^d=kY, in the classical model of the LR and very LR, a one-time increase in money supply will

I. increase the velocity of money.

II. increase the real GDP.

Select one:

A.

Only I is true.

B.

Only II is true

C.

Both I and II are true

D.

Neither I nor II is true.

8If the money demand function is given by (M/P)^d=kY, in the classical model of the LR and very LR, a reduction in money growth rate will

I. not change the real interest rate

II. increase the nominal interest rate.

Select one:

A.

Only I is true.

B.

Only II is true

C.

Both I and II are true

D.

Neither I nor II is true.

9.Which of the following statements is/are true?

I. According to the quantity equation of money,