Suppose the velocity of money is 8, the amount of money in circulation is $200 billion, the index of prices is 150, and real GDP is $10 billion. According to the strict quantity theory of money, if the money supply doubled to $400 billion,
a. the velocity of money would fall to 4.
b. the index of prices would increase to 300.
c. real GDP would increase to $20 billion.
d. the velocity of money would rise to 16.
B
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Refer to Table 3-2. The table above shows the demand schedules for caviar of two individuals (Ari and Sonia) and the rest of the market. At a price of $75, the quantity demanded in the market would be
A) 6 oz. B) 46 oz. C) 52 oz. D) 127 oz.
Which statement is true?
A. The higher the concentration ratio, the higher the degree of oligopolization. B. The lower the concentration ratio, the higher the degree of oligopolization. C. The concentration ratio remains constant as the degree of oligopolization rises. D. There is no relationship between the concentration ratio and the degree of oligopolization.
Which of the following is a wealth effect that would most likely cause an increase in the quantity of real GDP demanded in a nation, ceteris paribus?
a. The interest rate in Canada rises due to rising prices. b. Falling prices in France increase the real value of money. c. Australian consumers decrease their spending. d. Germany experiences a prolonged bout of high price levels.