The equation of exchange
A) is MV = PY.
B) becomes the quantity theory if velocity and the price level are constant.
C) cannot be used in an economy with inflation.
D) All of the above answers are correct.
A
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The cost of producing a good or service that is paid by people other than the producers is
A) the marginal cost. B) represented by the demand curve. C) represented by the supply curve. D) an external cost.
The conventional view among economists is that persistent budget deficits lead to ________ real interest rates and ________ private investment
A) higher; crowd in B) higher; crowd out C) lower; crowd in D) lower; crowd out
The nominal price of industrial red paint was $12 per gallon in 1993. To convert this value to the real price of paint in 2012 dollars, we should use the:
A) Consumer Price Index. B) Producer Price Index C) Fed funds rate. D) 30-day T-bill rate.
Rising labor productivity means that less labor is needed to produce the same level of output
a. True b. False Indicate whether the statement is true or false