Tackle the Test: Free-Response Questions

  1. Question

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    Rubric for FRQ 1 (10 points)

    1 point: The money supply

    1 point: No

    1 point: No

    1 point: A monetary policy rule

    1 point: M × V = P × Y

    1 point: M is the money supply.

    1 point: V is the velocity of money.

    1 point: P is the aggregate price level.

    1 point: Y is real GDP.

    1 point: Since V is stable, a steady growth of M will lead to a steady growth in GDP.

  2. Question

    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
    For each of the following economic theories, identify its fundamental conclusion.