The equation of exchange is a formula indicating that the number of monetary units times
A) the number of times each monetary unit is spent on final goods and services is identical to the price level times real GDP.
B) real GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services.
C) nominal GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services.
D) the price level is identical to the number of times each monetary unit is spent on final goods and services times real GDP.
A
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If the value of the output generated by a country's factors of production within the borders of foreign countries is higher than the value of output of foreign factors of production within its borders, ________
A) the GDP of the country is higher than its GNP B) the GDP of the country equals its trade balance C) the GDP of the country equals its GNP D) the GDP of the country is lower than its GNP
What characteristic of the endogenous growth model is crucial in giving the possibility of sustained growth?
A) It is embodied in people. B) It has constant returns to scale in production. C) It takes time to accumulate it. D) It grows at the same rate as consumption.
The "Law of Diminishing Marginal Returns" could also be termed the "Law of Increasing Marginal Costs."
Indicate whether the statement is true or false
What is the general format of the consumption function? Explain what each term means and use the consumption function to explain the three different ways that consumption can increase