According to the quantity theory of money, persistent inflation can only be caused by:
A. a continually-growing government deficit.
B. a high rate of unemployment.
C. a low rate of unemployment.
D. money supply growth that exceeds real GDP growth.
Answer: D
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Financial innovations such as direct deposit of paychecks, electronic payment of bills, and automated teller machines (ATMs) have likely ________
A) had minimal effect on M1 and M2 B) reduced the size of M2 relative to M1 C) increased both M1 and M2 relative to GDP D) caused the growth rates of M1 and M2 to become more stable E) reduced the size of M1 relative to M2
Transfer payments are included in which category under the expenditure approach to GDP accounting?
a. consumption b. government purchases c. net exports d. Transfer payments are not directly included in GDP calculations.
Refer to the accompanying figure. Growing 1,000 bushels of wheat and no bushels of corn each year is:
A. efficient and attainable. B. inefficient but attainable. C. inefficient and unattainable. D. efficient but unattainable.
A current account surplus exists when
A. net exports are positive. B. net exports are negative. C. financial flows out of a country for goods and services exceeds financial flows into the country for its goods and services. D. imports exceed exports.