Starting from Long-Run Equilibrium, If the Velocity of Money Increases

question 82

Multiple Choice

Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines) and no action is taken by the government:

• A) prices will rise in both the short run and the long run.
• B) output will rise in both the short run and the long run.
• C) prices will rise in the short run and output will rise in the long run.
• D) output will rise in the short run and prices will rise in the long run.

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Definitions:

Unconcerned

Not worried, troubled, or interested; indifferent.

Uninterested

Showing no desire or enthusiasm to be involved with or to know about something; indifferent.

Human Face

The front part of a person's head, including the forehead, eyes, nose, mouth, and chin, which is key to identifying individuals and expressing emotions.

Drive for Attachment

The innate human need to form close emotional bonds and relationships with others.