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Suppose that the velocity of circulation of money is constant and equal to 5. If the Fed increases the supply of money by 5%, which of the following statements can we claim to be true with certainty?
A. P will increase by 5%, Y will remain the same.
B. Y will increase by 5%, P will remain the same.
C. The nominal GDP will increase by 5%.
D. None o the above.
Suppose the real side of an economy is characterized by: Y = 80K1/2 L1/2 K=100 and L= 100 G = 3000 T = 3000
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People holding money in anticipation that bond yields will rise is an example of
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