According to the quantity theory of money, an increase in the money supply leads to:
A. an increase in prices, as there are more dollar bills spent on the same number of goods and services.
B. an increase in prices, as there are the same dollar bills spent on a greater number of goods and services.
C. a decrease in prices, as there are more dollar bills spent on the same number of goods and services.
D. a decrease in price, as there are the same dollar bills spent on a greater number of goods and services.
A. an increase in prices, as there are more dollar bills spent on the same number of goods and services.
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The benevolent social planner is based on an actual 19th century economist named Karl Marx
Indicate whether the statement is true or false
Refer to Figure 13.1. All else equal, a decrease in income taxes would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point B to point C. D) point C to point B.
A purchase of U.S. government securities by the Fed causes
A) an expansion of the money supply equal to the amount of the securities purchased. B) a contraction of the money supply equal to the amount of the securities purchased. C) an expansion of the money supply of more than the amount of the securities purchased. D) a contraction of the money supply of more than the amount of the securities purchased.
Suppose the current equilibrium price of pizza is $5 . If the government decides the price of pizza cannot rise above $4, the result of this policy would be
a. a shortage b. a surplus c. that the market would remain in equilibrium but with a larger quantity bought and sold than at $5 d. at the $4 price, the quantity sold would be greater than the quantity bought e. a shift of demand to the right