Since 1990, money supply in the Japanese economy has doubled. Over the same period, nominal GDP in Japan has stayed almost constant. According to the Quantity Theory of Money, this suggests that a) the level of real GDP must have decreased. b) the level of real GDP must have increased. c) the velocity of money must have decreased. d) none of the above
11. Since 1990, money supply in the Japanese economy has doubled. Over the same period,
nominal
this suggests that
a) the level of real GDP must have decreased.
b) the level of real GDP must have increased.
c) the velocity of money must have decreased.
d) none of the above
13. According to the trilemma, which of the following is a potential cost of adopting a flexible
exchange rate regime?
a) A country may have to restrict the size of capital flows.
b) A country may su↵er from a volatile exchange rate.
c) A country loses the ability to conduct independent monetary policy.
d) None of the above.
14. In an open economy, if the level of net exports rises, it must be the case that
a) there is an increase in saving.
b) there is an increase in investment.
c) the value of saving less investment must fall.
d) none of the above
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