Which of the following is the dynamic version of the quantity theory of money?
A. Growth in the money supply ? inflation = growth in the velocity of money ? real growth
B. Money supply × velocity = price level × real GDP
C. Money supply + velocity = inflation + real growth
D. Growth in the money supply + growth in the velocity of money = inflation + real growth
Ans: D. Growth in the money supply + growth in the velocity of money = inflation + real growth
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In the above figure, which movement illustrates the impact of the price level and money wage rate falling at the same rate?
A) E to H B) E to K C) E to J D) E to G
If inventory levels are decreasing, then we should expect business firms to
A. decrease prices. B. decrease output. C. lay off workers. D. increase output.
A decrease in the availability of raw materials that increases the price level is called a ________ shock
A) negative demand B) positive demand C) negative supply D) positive supply
Lindahl prices for collective consumption goods are _____
a. are sufficient to achieve political agreement on the optimal level of output b. are necessary to achieve political agreement on the optimal level of output c. are sufficient for economic efficiency d. are necessary for economic efficiency