Author Question: The quantity theory of money tells us that real money balances are proportional to income, since ... (Read 64 times)

arivle123

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The quantity theory of money tells us that real money balances are proportional to income, since ________.
 
  A) velocity is assumed constant in the short run
  B) the supply and demand of money are equal in equilibrium
  C) changes in the quantity of money lead to proportional changes in the price level
  D) all of the above
  E) none of the above

Question 2

According to a study by Thomas Cooley and Gary Hansen, the cost in lost consumption of a 10 per annum rate of inflation is
 
  A) negative.
  B) approximately 0.001.
  C) approximately 0.5.
  D) approximately 5.0.



xMRAZ

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Answer to Question 1

D

Answer to Question 2

C



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