As Monetarists View the Equation of Exchange

question 35

Multiple Choice

As monetarists view the equation of exchange,

• A) V changes erratically and unpredictably.
• B) V is quite stable.
• C) V usually changes in the same direction of any given change in M.
• D) V usually changes in the opposite direction of any given change in M.

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Definitions:

Encoding Specificity

The principle that recall is more effective if the context at the time of encoding matches the context at the time of retrieval.

Cognitive Economy

A principle in cognitive psychology that suggests the brain strives to simplify information processing by using the most efficient and simplest ways to understand and process information.

Spreading Activation

A theory in cognitive psychology that suggests ideas in memory are connected and that the activation of one idea can trigger the activation of related ideas.

Lexical Decision Tasks

A psychological experiment that involves determining whether a string of letters is a word or a non-word.