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Macroeconomics - Monetary Economics
I need some help with the following questions:
Answer True, False or Uncertain. Briefly explain your answer
1. A permanent increase in money supply cannot affect any variable in the OLG model of money.
2. In the OLG model of money, fiat money does not pay interest, so money's rate of return is 1.
3. Suppose that the government finances its expenditure through seigniorage revenue. There exists an upper limit on the amount of the seigniorage revenue that can be generated.
4. The original Phillips curve finds that there is a negative correlation between inflation and output growth.
5. The Lucas critique indicates that the government can use a random monetary policy to stimulate output.
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