Indicate whether the following statement is true, false, or uncertain and explain your answer using words graphs and equations as appropriate.
If the commercial banking system does not gold any reserves, then it cannot affect the money supply.
If consumption depends positively on the level of real balances and real balances depend negatively on the nominal interest rate in a neoclassical model then the nominal interest rate rises 1% for each 1% rise in the money growth rate.
If only unanticipated changes in the money supply affect real GDP, the public has rational expectations and everyone has the same information about the state of the economy, then a policy of keeping the money supply constant is optimal
