True or False:
1. The magnitude of velocity does not depend on the definition of money that is used.
2. If the money supply increases and the velocity of money does not change, the result will be higher prices (inflation), greater real output of goods and services, or a combination of both.
3. Expanding the money supply, unless counteracted by increased hoarding of currency (leading to a decline in V), will have the same type of impact on aggregate demand as an expansionary fiscal policy.
4. Reducing the money supply, other things being equal, will have a contractionary impact on aggregate demand.
5. The velocity of money is a constant.
6. If velocity changes but moves in a fairly predictable pattern, the connection between money supply and GDP is still fairly predictable.
7. The cause of hyperinflation is excessive money growth.
8. The FOMC of the Federal Reserve is unable to act quickly in emergencies.