If an economy produces 2,000 units of output with a price level of $1 and the money supply (M) is $1,000, velocity is:
A. 2.
B. 5.
C. 500.
D. 50.
Answer: A
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In monopolistic competition, the presence of a large number of firms making a differentiated product means that
A) each firm can set the price of its particular product. B) each firm must charge the same price. C) the price is established by collusive behavior. D) each firm must produce the same quantity. E) firms cannot compete with each other on the basis of price.
A sudden stop will be easier to navigate if the country borrows internationally in foreign currencies and lend locally in its domestic currency
Indicate whether the statement is true or false
Your indifference curves for good X (horizontal axis) and good Y (vertical axis) are vertical lines because you do not gain any satisfaction from consumption of Y
As the price of X declines, the change in consumption of X is entirely composed of the: A) income effect. B) substitution effect. C) Giffen effect. D) independent good effect.
The income effect of an increase in the price of backpacks (a normal good) is a(n)
a. decrease in the demand for backpacks b. decrease in the quantity demanded of backpacks c. increase in the demand for backpacks d. increase in the quantity demanded of backpacks e. new demand curve because everything else is no longer constant