34. The quantity theory of money implies that hyperinflation is caused by. a. ra

ID: 1130220 • Letter: 3

Question

34. The quantity theory of money implies that hyperinflation is caused by.

a. rapid growth in the demand of money

b. too much production

c. growth in the supply of money that far exceeds the growth of production

d. corporate greed.

33. The data show that mortgage rates, business loan rates and other interest rates that affect economy activity.

a. move with the federal funds rate

b. move in the opposite direction from the federal funds rate

c. move independently of the federal fund rate

d. never change at all

34. Option c is correct (MV = PY)

Growth in the supply of money that far exceeds the growth of production would cause hyperinflation. (Increase in M would cause increase in P)

33. Option a is correct

Mortgage rates, business loan rates and other interest rates that affect economy activity move with the federal funds rate.

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