Record estimated bad debts assuming that Allowance for Doubtful Accounts has a \$1,600 credit balance.

In the long run, money demand and money supply determine the value of money and the real interest rate. Othe real interest rate but not the value of money. neither the value of money nor the real interest rate. the value of money but not the real interest rate.

Which of the following helps to explain why the "inflation fallacy" is a fallacy? Nominal incomes tend to rise at the same time that the price level is rising, leaving real income unchanged. Inflation only changes real variables. As the price level rises, the value of a dollar falls. Increases in the price level can be created by increases in money demand.

The nominal interest rate is 6 percent and the inflation rate is 3 percent. What is the real interest rate?

Which of the following is consistent with the idea that high money supply growth leads to high inflation? The quantity theory and data from classic hyperinflations that occurred during the 1920s in Austria, Hungary, Germany, and Poland. Neither the quantity theory nor evidence from classic hyperinflations that occurred during the 1920s in Austria, Hungary, Germany, and Poland. Evidence from classic hyperinflations that occurred during the 1920s in Austria, Hungary, Germany, and Poland but not the quantity theory. The quantity theory but not evidence from classic hyperinflations that occurred during the 1920s in Austria, Hungary, Germany, and Poland.

The velocity of money is the average number of times per year a dollar is spent. the rate at which the Fed puts money into the economy. the same thing as the long-term growth rate of the money supply. the money supply divided by nominal GDP.