Which of the following statements is true?
A) Velocity equals the money supply.
B) GDP is larger than the money supply if velocity is greater than 1.
C) The money supply must be equal to GDP.
D) GDP is always twice the money supply.
B
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If currency speculators believe South Korea will have much lower inflation in the future than the United States, this will most likely cause the South Korean won to ________ and the U.S. dollar to ________.
A. depreciate; appreciate B. appreciate; appreciate C. depreciate; depreciate D. appreciate; depreciate
What are transfer payments? Give two examples
What will be an ideal response?
Assume a marginal propensity to consume of three-fourths. If private planned investment decreases by $10 billion and government spending increases by $13 billion, the national income will increase by
a. $4 billion. b. $12 billion. c. $3 billion. d. $2.25 billion.
Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
The equilibrium to the game results in ________ for Amy and Tracy relative to what they could get if they could solve their ________.
A. lower payoffs; commitment problem B. lower payoffs; prisoner's dilemma C. higher payoffs; commitment problem D. lower payoffs; credible threat