The velocity of money is the total number of times per year that a dollar is used to purchase final goods and services
Indicate whether the statement is true or false
false
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The formula for the government spending multiplier is
A) (1 + b) / (1 - b). B) -b / (1 - b). C) 1 / (1 - b). D) b / (1 - b).
Suppose the nominal interest rate is 5% and the rate of inflation is 5%. The real interest rate is therefore
A) 0%. B) 1%. C) 5%. D) 6%.
If the Fed buys government securities on the open market, the money supply will contract
Indicate whether the statement is true or false
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 If Island Bikes charges a single price to all of its customers, then what price will it charge?
A. $4 B. $12 C. $8 D. $16