According to the quantity theory of money, in the long run
A) an increase in the quantity of money creates an increase the price level but no increase in real GDP.
B) the quantity of money in the economy will always be just the right amount.
C) an increase in the quantity of money creates an increase in the price level and in real GDP.
D) None of the above answers are correct.
A
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Globalization and skill-biased technological change have contributed to:
A. increasing wage inequality. B. the long-term growth in real wages. C. the slowdown in productivity since 1973. D. high rates of employment in Western Europe.
Most loopholes in the income tax system
a. are more likely to be exploited by the wealthy. b. make it more progressive. c. were created by the tax reforms instituted in 1986. d. do not affect the economic decisions of the people who benefit from them.
Answer the following statement true (T) or false (F)
1) Average fixed costs diminish continuously as output increases. 2) Economic profit is found by subtracting accounting costs from total revenue. 3) A firm's economic profit is usually higher than its accounting profit. 4) The law of diminishing returns explains why short-run marginal cost curves are upsloping. 5) The law of diminishing returns explains diseconomies of scale.
Which pair of goods is most likely to have a negative cross-price elasticity?
A. Peanut butter and jelly. B. Milk and pencils. C. All cross-price elasticities are negative, but often reported in absolute value. D. Butter and margarine.