If government spending rises but the central bank changes the ...

[james]

If government spending rises but the central bank changes the money supply to prevent income from changing, then
 
  a. both consumption and investment will remain unchanged.
  b. consumption rises and investment falls.
  c. investment falls but consumption rises.
  d. both consumption and investment rises.

Question 2

According to the quantity theory of money, a 10-percent increase in the money stock would lead to a 10-percent rise in the
 
  a. the money wage and the price level.
  b. level of real GNP.
  c. level of nominal GNP.
  d. the money wage and the price level, but the price level rises by more
  e. Both a and c

[ndhahbi]

Answer to Question 1

C

Answer to Question 2

E