If V is constant and Y is fixed, any change in M
A. leads to a smaller change in P.
B. leads to a larger change in P.
C. does not lead to change in P.
D. leads to a proportionate change in P.
Answer: D
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Which of the following occurs when a shortage occurs in the market for a good?
a. Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption. b. Quantity supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption. c. Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption. d. Quantity supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
If, at the current price, there is a shortage of a good, then
a. sellers are producing more than buyers wish to buy. b. the market must be in equilibrium. c. the price is below the equilibrium price. d. quantity demanded equals quantity supplied.
Jamal earns $160,000 per year and Josephina earns $80,000 per year. They both pay the same price to buy the identical automobile and each pays $1,600 in sales tax. In relation to their relative incomes, this is an example of a
A) regressive tax. B) progressive tax. C) proportional tax. D) marginal tax.
The transactions approach to measuring M1 includes all of the following EXCEPT
A. currency. B. traveler's checks. C. checking accounts. D. certificates of deposit.