Question
help and explain why this answer Cross out the incorrect answer in the question? (a) Changes in V are small and predictable; hence any increase
help and explain why this answer
Cross out the incorrect answer in the question?
(a) Changes in V are small and predictable; hence any increase in the money supply M will have a significant effect upon total spending. Keynesian view/Monetarist view
(b) M and V vary inversely. Keynesian view/Monetarist view
(c) V is determined by peoples' desire to hold money balances, which in turn is determined by expectations. Keynesian view/Monetarist view
(d) V is exogenously (independently) determined. Keynesian view/Monetarist view
(e) If MV falls as a result of a tight monetary policy, then Y will fall as well as P. Keynesian view/Monetarist view
(f) In the long run Y is determined independently of the level of aggregate demand, such that any rise in MV will ultimately simply lead to a rise in prices. Keynesian view/Monetarist view Cross out either rise or fall in the question
An increase in the money supply will affect the level of economic activity in the country through a sequence of events. In each of the following, delete the wrong words.
1. The rise in the money supply will lead to a rise / fall in the rate of interest.
2(a) The rise / fall in the rate of interest will lead to a rise / fall in investment and other forms of borrowing.
2(b) The rise / fall in the rate of interest will lead to a rise / fall in the rate of exchange.
3. The rise / fall in the exchange rate will lead to a rise / fall in exports and a rise / fall in imports.
4. The rise / fall in investment and the rise / fall in exports and rise / fall in imports will lead to a multiplied rise / fall in national income and a possible rise / fall in prices. Ensure that you will be able to discuss and explain your answers with your Seminar Teacher during your Teams Lesson
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