Using the Cambridge equation, by how much does the demand for money rise at a constant real GDP of $2,000 billion when the price level rises by 10 percent from 1.00, given k = 0.25?
A) $200 billion
B) $20 billion
C) $550 billion
D) $50 billion
D
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According to your authors, entrepreneurial innovation is similar to arbitrage because both activities ultimately involve
A) obtaining inputs at relatively high prices and selling the output at lower prices. B) obtaining inputs at relatively low prices and selling the output at higher prices. C) the absence of uncertainty. D) the presence of perfect and complete information.
Figure 5-15
Hal initially consumes the combination marked as A in Figure 5-15. After his income increases, Hal consumes combination B. We can conclude that Hal views
A. X as an inferior good and Y as a noninferior good. B. X as a noninferior good and Y as an inferior good. C. both X and Y as noninferior goods. D. both X and Y as inferior goods.
If the ratio of net worth to vault cash is .2, the prime rate is .05, and the required reserve ratio is .25, the demand deposit expansion multiplier is
A) 2. B) 4. C) 5. D) .25.
Excess volatility refers to
A) the unwillingness of financial analysts to consistently recommend the same stocks. B) the greater volatility of futures prices compared to the volatility of prices of the underlying assets. C) the tendency for stocks with high rates of returns also to have quite variable returns. D) the larger movements in market prices of stock than in their fundamental values.