If Initially the Money Supply Is $2 Trillion,velocity Is 5,the

question 75

Multiple Choice

If initially the money supply is $2 trillion,velocity is 5,the price level is 2,and real GDP is $5 trillion,a fall in the money supply to $1 trillion

• A)reduces real GDP to $2.5 trillion.
• B)causes velocity to rise to 10.
• C)decreases the price level to 1.
• D)decreases the price level to 1 and decreases velocity to 2.5.

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Definitions:

Flux Leakage

The number of magnetic flux lines that radiate into space and do not cut through the conductors of an inductor or secondary winding of a transformer.

Magnetizing Flux

The magnetic field generated in a material, or space, by the flow of electric current or by magnetization.

Flux Coupling

The process or degree to which magnetic lines of force pass from one component to another, such as in transformers.

Flux Reactance

The opposition that inductance offers to alternating current due to the magnetic flux linkage.