The Keynesian ideology of velocity and output.

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Some economics, notably Keynesians, believe that _______________.Group of answer choices A. since both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes the quantity theory of money which explains prices B. even though velocity isnt constant, it is predictable C. If a change in M occurs, it may not only affect P, but also and at the same time affect Q

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Chapter 16, Problem 9SQ

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The Keynesian ideology of velocity and output.

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Some economics, notably Keynesians, believe that _______________.Group of answer choices A. since both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes the quantity theory of money which explains prices B. even though velocity isnt constant, it is predictable C. If a change in M occurs, it may not only affect P, but also and at the same time affect Q

An economy is at full employment. The quantity of money is growing at 8.3 percent a year, the nominal interest rate is 9.5 percent a year, real GDP is growing at 5.0 percent a year, and the inflation rate is 3.1 percent a year. What is the change in the velocity of circulation? Why might it be changing? The velocity of circulation is _______. A. increasing by 3.1 percent a year B. decreasing by 0.2 percent a year C. increasing by 0.2 percent a year D. constant

The economy of Macro Island is described by the quantity equation with constant velocity. All residents of Macro Island understand the quantity theory and use it to form their expectations of inflation. Real income grows at a steady 2 percent per year, and the nominal interest rate is 5 percent. In one year, people had expected the money supply to grow by 4 percent, but in fact it grew by only 3 percent. a. What was the inflation rate? (3% 4% 1% 2%) b. What was the expected inflation rate? (1% 4% 3% 2%) c. What was the ex ante real interest rate? (4% 2% 1% 3%) d. What was the ex post real interest rate? (2% 1% 4% 3%) e. Did the deviation of inflation from what was expected hurt creditors or debtors? ( Creditors Debtors)