If the Central Bank Decides to Keep the Increase in the Money

question 63

Multiple Choice

If the central bank decides to keep the increase in the money supply constant and the velocity of money turns out to be lower than expected, then:

• A) higher unemployment may result.
• B) lower unemployment may result.
• C) inflation will be higher than expected.
• D) inflation will be unaffected, but unemployment will be lower.

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Definitions:

Major Depression

A condition of mental well-being defined by an enduring period of depression or diminished interest in pursuits, resulting in major disruptions in daily living.

Catatonic

Relating to or characterized by catatonia, a state of immobility and unresponsiveness in someone who is otherwise awake.

Melancholic

A subtype of depression characterized by severe features, such as early morning awakening, significant weight loss, and excessive guilt.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a manual published by the American Psychiatric Association that provides guidelines for the diagnosis of mental disorders.