Monetarists Believe That

question 134

Multiple Choice

Monetarists believe that:

• A) velocity is constant.
• B) velocity is highly predictable.
• C) there are three motives for demanding money.
• D) changes in the money supply cause changes in velocity.
• E) a change in the money supply can affect real GDP.

---

Definitions:

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, stringent regulations, and established brand loyalty.

Pure Monopoly

A market structure where a single firm is the sole producer of a product or service with no close substitutes.

Small Town

A community with a small population, typically larger than a village but smaller than a city.

Foreign Exchange

The exchange of one currency for another or the conversion of one currency into another currency.