True or False:
1. An expansionary policy can be thought of as an increase in the money supply or an increase in the interest rate.
2. A change in the nominal interest rate tends to change the real interest rate by the same amount in the short run because the expected inflation rate is slow to change in the short run.
3. An increase in AD brought about through monetary policy can lead to only a temporary, short-run increase in real GDP if the economy is initially operating at or above full employment, with no long-run effect on output or employment.
4. If the Fed pursues a contractionary monetary policy when the economy is at full employment, the Fed could cause a recession.
5. The Fed buying bonds on the open market will lead to an appreciation of the dollar, an increase in net exports, and an increase in RGDP in the short run.
6. The money supply times velocity equals the price level times real GDP.
7. If individuals are writing lots of checks on their checking accounts and spending currency as fast as they receive it, velocity will tend to be low.
8. Velocity equals nominal GDP divided by the money supply.