The simple quantity theory of money predicts that changes in
A) the money supply lead to strictly proportional changes in the price level.
B) the money supply do not affect the price level.
C) the price level lead to strictly proportional changes in velocity and GDP.
D) velocity lead to nearly proportional changes in the money supply.
A
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An increase in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by an increase in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the increase in aggregate expenditure relative to the initial level of GDP.
The natural rate of interest rises with a __________ shift of the __________ curve
A) rightward; IS B) rightward; LM C) leftward; IS D) leftward; LM
Suppose there is a tornado that levels a city. As rebuilding begins, how might you analyze this effect in the market for lumber?
A. The demand for lumber would increase, increasing both the equilibrium price and quantity. B. The supply of lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. C. The demand for lumber would increase, decreasing the equilibrium price and increasing the equilibrium quantity. D. The supply of lumber would decrease, increasing the equilibrium price and decreasing the equilibrium quantity.
An increase in the quantity of resources available
What will be an ideal response?