A change in quantity demanded of a good always results from a change in
a. tastes
b. the price of that good
c. income
d. the price of substitutes
e. the price of complements
b the price of that good
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Most economists believe that real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its persistent trend in
a) neither the short run nor the long run. b) the very long run. c) the short run. d) the medium long run.
What is the equation of exchange? Suppose that real GDP and velocity are constant. In this case, what effect will an increase in the quantity of money have?
What will be an ideal response?
In the mid-1970s, changes in oil prices greatly affected U.S. inflation. When oil prices rose, the U.S. would experience:
A. Cost-push inflation and rising output B. Demand-pull inflation and rising output C. Cost-push inflation and falling output D. Demand-pull inflation and falling output
Efficiency wages do not lead to:
A. structural unemployment. B. wages above their equilibrium level. C. lower firm profits. D. increased worker productivity.