True or False (Give an explanation for why).
Problem 1) Since the Fed implemented "quantitative easing", the money supply has increased dramatically.
Problem 2) If the velocity of money is stable, the Quantitative Theory of Money predicts that inflation rises one-for-one with money growth.
Problem 3) A country runs a budget deficit financed by printing money. In this situation, you'd expect to see inflation and a currency appreciation.
Problem 4) If the government implements a stimulus package by cutting personal taxes, it is sure to stimulate consumption but also discourage investment.
Problem 5) High world interest rates are the natural consequence of global imbalances arising from a "global savings glut".
Problem 6) Productivity growth in emerging markets usually is driven by promoting natural resource and mineral development.