Given the strict quantity theory of money, if the quantity of money doubled, prices would:
A. fall by half.
B. double.
C. remain constant.
D. increase somewhat but less than double.
Answer: B
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Using the expenditure approach to GDP accounting, which of the following are included in the investment category?
a. the purchase of government bonds b. the purchase of corporate bonds c. the purchase of corporate stocks d. none of the above
Which of the following statements describes a surplus?
a. A surplus is the same as an excess demand. b. A surplus occurs when the price is above equilibrium price. c. A surplus occurs when the price is below equilibrium price. d. A surplus occurs when the quantity demanded exceeds the quantity supplied.
A tax levied on the buyers of a good shifts the
a. supply curve upward (or to the left). b. supply curve downward (or to the right). c. demand curve downward (or to the left). d. demand curve upward (or to the right).
When an externality is present, the market equilibrium is
a. efficient, and the equilibrium maximizes the total benefit to society as a whole. b. efficient, but the equilibrium does not maximize the total benefit to society as a whole. c. inefficient, but the equilibrium maximizes the total benefit to society as a whole. d. inefficient, and the equilibrium does not maximize the total benefit to society as a whole.