MV = PY represents the
A. banking equilibrium.
B. federal funds equation.
C. Keynesian equation of equality.
D. quantity theory of money.
Answer: D
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Investment banks specialize in
(a) Managing borrowing and the deposits of its customers (b) Managing commercial papers (c) Facilitating the loan interactions between banks and merchants (d) Handling long-term securities such as stocks, bonds and other securities.
New growth theory is concerned with
A) finding a good way to measure economic growth. B) increasing the savings rate in the U.S. C) understanding the forces that increase productivity. D) understanding how compounding works.
Which of the following price ceilings would be binding in this market?
A. $14 B. $12 C. $8 D. $10
Spyros owns a pancake restaurant. For years, customers have had two pricing options: two pancakes for $6.00 or three pancakes for $8.00. Both pricing options sell equally well. Spyros wants to add an option to order four pancakes to the menu. Using your knowledge of diminishing marginal return, what price would you recommend he set for four pancakes in order to maximize the number of pancakes he sells? Explain how you arrived at your answer.
What will be an ideal response?