Check Your Econ 3

Dreary Wrote: ------------------------------------------------------- > > pepp, excellent common sense. Just add to it a > little knowledge of graphs and some equations and > you’ll do well in econ. > As you can, I edited the post 3 times, so it wasn’t easy to do some common sense work in this question. But looking back I should’ve picked A for certain. Heres what was my thought process: with addition of money price level won’t go down so eliminate D. worker productivity has nothing to do with question so eliminate B with regards to nominal GDP i kept saying this can’t go down in short run, this just wont go down in short run, but I wasn’t really sure what velocity of money means so I said A or C. Had i just said, C just can’t happen, i’d be left with A, and at that point I’d pick A.

map1, > c. In the short run, nominal GDP will decline. not correct, check again. I bet map1 is a little tired tonight…usually much sharper!

yeah, usually:)

so If I keep the FED in mind, it can help me remember the MV = PT equation. $ supply up, prices up, inflation ensues. Fed figts inflation and raises rates higher rates = lowers money supply, ultimately. qaunt theory of money can be part of the Fed’s thinking process???

Cooool, I guessed A as my answer before reading down…