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Macroeconomics

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617390

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BuyFindarrow_forward

Macroeconomics

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617390
Chapter 14.2, Problem 2ST
Textbook Problem
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Can a change in velocity offset a change in the money supply (and thus leave no effect on aggregate demand)? Explain your answer.

To determine

Change in velocity and money supply.

Explanation of Solution

Yes, a change in the velocity can offset the change in the money supply leaving the aggregate demand curve unchanged. It is assumed that the money supply in the economy increases and the velocity of money decreases at the same time...

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Chapter 14 Solutions

Macroeconomics
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