Suppose the economy is in a recession.If the central bank intervenes to eliminate the recessionary gap, then in the long-run, the inflation rate will be
Suppose the economy is in a recession.If the central bank intervenes to eliminate the recessionary gap, then in the long-run, the inflation rate will be _____ than had they not intervened.
- greater
- less
- no different
- not enough information
Which of the following statements best describes the concept of monetary neutrality?
- Changes in the money supply have no affect on real variables in the short-run, but do have an effect on nominal variables in the short-run
- Changes in the money supply have no affect on nominal variables in the short-run, but do have an effect on real variables in the short-run
- Changes in the money supply have no affect on real variables in the long-run, but do have an effect on nominal variables in the long-run
- Changes in the money supply have no affect on nominal variables in the long-run, but do have an effect on real variables in the long-run
Suppose that in Nation X in 2012, the money supply was 20,000, the velocity of money was 6 and real GDP was 60,000 units.
Given the information above, what was the price level in 2012?
- $1.80
- $2.00
- $3.00
- none of the above
Given the information above, if, all else constant, the central bank of Nation X increased the money supply the money supply to $20,500 in 2013, then what would the price level be in 2013?
- $1.60
- $2.46
- $2.50
- none of the above
Given the information above, if, all else constant, the central bank of Nation X increased the money supply to $20,500 in 2013, then what would the inflation rate be between 2012 and 2013?
- 2.30%
- 3.40%
- 5.00%
- none of the above
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