If velocity is constant, which of the following results flow from the quantity equation?
A) Nominal GDP could change only if there were a change in the money supply.
B) In the short run, nominal GDP could change only if there were a change in the money supply and in the long run, nominal GDP could change only if there were a change in the money supply.
C) In the short run, nominal GDP could change only if there were a change in the money supply but
in the long run, nominal GDP is affected by changes in any component of GDP.
D) In the short run, nominal GDP is affected by changes in any component of GDP but in the long
run, nominal GDP could change only if there were a change in the money supply.
Ans: A) Nominal GDP could change only if there were a change in the money supply.
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Appendix: Research suggests that an auction for a private value item will yield the HIGHEST payout if:
a. we use a Dutch auction b. we use an English auction c. we use only cash, and not allow credit cards d. use a fixed price
The rule of reason originated in the __________________ case of 1920.
Fill in the blank(s) with the appropriate word(s).
Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Cost-push inflation occurs if
A. the aggregate supply curve shifts from AS1 to AS2. B. the aggregate supply curve shifts from AS1 to AS0. C. the economy moves from Point A to Point B on aggregate supply curve AS1. D. the economy moves from Point A to Point C on the aggregate supply curve AS1.
After a small hurricane in Florida, unemployment is low as there is a great deal of construction work and businesses run at full capacity. This suggests that
A) the economy is operating above the full-employment level and will eventually adjust back to long-run aggregate supply. B) living standards are falling as employment and economic activity are too high. C) the economy is operating below its long-run level and living standards are less than they would have been without the hurricane. D) the hurricane is beneficial since it is increasing employment and replacing less efficient capital with newer and more efficient capital.