Author Question: In 2008 and 2009, the quantity theory of money did a ________ job of predicting year-to-year changes ... (Read 71 times)

JMatthes · **on:** Jun 29, 2018

In 2008 and 2009, the quantity theory of money did a ________ job of predicting year-to-year changes in the inflation rate because ________.

A) good; interest rates behaved predictably
B) poor; the Fed changed the growth rate of the quantity of money too quickly
C) poor; velocity of circulation plunged
D) good; real GDP remained stable
E) poor; the price level and the velocity of circulation did not change

Question 2

In the foreign exchange market, the demand for dollars decreases and the demand curve shifts leftward if the

A) U.S. interest rate differential increases.
B) U.S. exchange rate falls.
C) U.S. interest rate differential decreases.
D) U.S. exchange rate rises.
E) expected future exchange rate rises.