If Velocity Does Not Change and the Quantity of Money

question 25

Multiple Choice

If velocity does not change and the quantity of money grows at the same rate as does real GDP, then in the long run

• A) the inflation rate equals the growth rate of the quantity of money.
• B) the nominal interest rate is less than the real interest rate.
• C) the real interest rate is less than the nominal interest rate.
• D) the inflation rate equals zero.
• E) the nominal interest rate equals zero.

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Definitions:

Behavioural Activation

A therapy technique focused on helping individuals improve their mood by increasing their engagement in positively reinforcing activities.

Response Shaping

A process of shaping behaviour by gradual approximations of what is expected. For example, a child who is intellectual disability and may be unable to get dressed independently can be taught the process gradually by being rewarded for putting on one item at a time until he or she is eventually able to handle the entire task.

Exposure

A therapeutic technique used in behavioral therapy to treat anxiety disorders that involves the exposure to the feared object or context without any danger in order to overcome their anxiety.

Exposure Therapy

Any therapeutic procedure that repeatedly confronts the person with a stimulus that typically elicits an undesirable behaviour or an unwanted emotional response until the behaviour or response no longer occurs.