Suppose That Monetary Neutrality and the Fisher Effect Both Hold

question 99

Multiple Choice

Suppose that monetary neutrality and the Fisher effect both hold and the money supply growth rate has been the same for a long time.Other things the same a higher money supply growth would be associated with

• A)both higher inflation and higher nominal interest rates.
• B)a higher inflation rate,but not higher nominal interest rates.
• C)a higher nominal interest rate,but not higher inflation.
• D)neither a higher inflation rate nor a higher nominal interest rate.

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Definitions:

Ego

A component of Sigmund Freud's model of the psyche that mediates between the demands of the id, the superego, and the external world, playing a crucial role in decision making and reality testing.

Unconscious

Refers to the part of the mind that contains thoughts, memories, and desires not within the sphere of current awareness but that nonetheless influence behavior.

Preconscious

A part of the mind that contains thoughts, feelings, and memories that are not currently in conscious awareness but can easily be brought to consciousness.

Conscious

The state of being aware of and responsive to one's surroundings and internal thoughts and feelings.