Refer to the above data. If the marginal cost of producing this good at the optimal quantity is $4, the optimal quantity must be:
a. 1 unit.
b. 2 units.
c. 3 units.
d. 4 units.
Answer: c. 3 units.
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The Friedman rule works because
A) it maximizes productivity. B) it eliminates over-consumption. C) it encourages people to hold the appropriate quantity of money. D) it can be implemented by the private sector.
If, as price increases by 10 percent, total revenue decreases by 10 percent demand is
a. elastic. b. unit elastic. c. inelastic. d. perfectly inelastic.
The velocity of money measures the
A. proportion of the money supply which is held as an asset. B. ratio of the transactions demand to the asset demand for money. C. average annual rate of increase in the money supply. D. number of times per year the average dollar is spent on final goods and services.
Although not included in the M1 definition of money, ______ are part of the M2 definition of currency.
a. traveler’s checks b. coins c. checkable deposits d. money market mutual fund shares