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Author Question: Because there may be a time lag between a change in the money supply and its effects on nominal GDP, ... (Read 13 times)

cagreen833

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Question 1

The Fed decreases money supply. In this case, the time lag problem of monetary policy may


◦ increase the velocity of money in the short run.
◦ increase real GDP in the short run.
◦ decrease the velocity of money in the short run.
◦ None of these

Question 2

Because there may be a time lag between a change in the money supply and its effects on nominal GDP, it is ________ to test whether the velocity of money is constant over time.


◦ easy
◦ difficult
◦ impossible
◦ pointless


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Marked as best answer by cagreen833 on Apr 19, 2019

nanny

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