Suppose the quantity of money is $1,000, the velocity of circulation is 6, and real GDP is $4,000. Then the price level is
A) 2.0. B) 2.5. C) 1.1. D) 1.5. E) 6.0.
D
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Which one of the following statements is NOT true?
A) The classical model assumes that people suffer from money illusion. B) The classical model assumes that no single seller of a commodity can affect its price. C) The classical model assumes that pure competition exists. D) The classical model assumes that people are motivated by self-interest.
A negative balance in the capital and financial account means the economy is
A) lending to the rest of the world. B) running a capital account surplus. C) borrowing from the rest of the world. D) importing more than it is exporting.
Which of the following statements is correct?
a. For all firms, marginal revenue equals the price of the good. b. Only for competitive firms does average revenue equal the price of the good. c. Marginal revenue can be calculated as total revenue divided by the quantity sold. d. Only for competitive firms does average revenue equal marginal revenue.
When private firms reduce investment because of the increase in interest rates brought about by government borrowing it is termed:
A. rent seeking. B. logrolling. C. crowding out. D. monetary policy.