If we consider the quantity theory of money and Professor Irving Fisher, who did a lot of his work in the early 20th century, why might Professor Fisher feel less confident about predicting constant velocity of money today than when he did his work?
What will be an ideal response?
No, Professor Fisher would not have been very confident. Financial innovation has both created a variety of assets that serve some of the uses of money and reduced transactions costs associated with converting assets into a means of payment. Together, these have make velocity both grow and become less predictable.
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What are the problems associated with price regulation?
What will be an ideal response?
Total revenue falls as the price of a good decreases if the price elasticity of demand is
a. Elastic b. Inelastic c. Unitary elastic d. Perfectly inelastic
An industry with Herfindahl-Hershman Index of 1,000 would best be described as
A. oligopoly. B. monopoly. C. monopolistic competition. D. perfect competition.
When analyzing the behavior of oligopolists, which of the following is crucial for the success of game theoretic analysis?
A. Payoffs do not need to reflect the true payoffs of the oligopolists, they just need to be greater than or equal to zero. B. Do not construct the payoffs of the oligopolists to be interdependent, as the payoff of one player usually does not affect the payoff of the other players. C. Assume that oligopolists always move simultaneously. D. Make sure the problem you are considering is of a one-shot or repeated nature, and you model it accordingly because the order in which players make decisions is important.