Stable velocity as a contributing factor to successfully using money growth as a stabilizing monetary policy tool, is more important in an environment where:
A. inflation occurs, the problems caused by a variable velocity are just as severe at low levels of inflation as at high levels of inflation.
B. inflation is extremely high (e.g., over 100 percent).
C. inflation is low (e.g., less than 10 percent).
D. there is deflation.
Answer: C
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Microsoft hires marketing and sales specialists to decide what prices it should set for its products, whereas a wealthy corn farmer in Iowa, who sells his output in the world commodity market, does not. Why is this so?
A) because unlike Microsoft, the wealthy corn farmer is probably a monopolist B) because the wealthy corn farmer is a price taker who chooses his optimal output independently of market price but Microsoft's optimal output depends on the price it selects C) because Microsoft could potentially lose sales if it sets prices indiscriminately D) because Microsoft is large enough to hire the best people in the field
A monopolistically competitive firm that earns a profit in the short run will definitely incur a loss in the long run
a. True b. False Indicate whether the statement is true or false
Suppose that there are 175 voters in an election and that 80 of them prefer a $100 budget while the remainder prefer a $150 budget. Which of the following statements is true?
a. The Condorcet Paradox predicts that the $100 budget will win even though fewer people prefer that budget. b. The median voter theorem predicts that the winning budget will be $125, the median of the preferences of the two types of voters. c. Arrow's impossibility theorem says that the winning budget cannot be determined in this election since there is no unanimity. d. None of the above.
Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?
A. $0.70 per quart and 200 quarts of milk. B. $0.30 per quart and 100 quarts of milk. C. $0.50 per quart and 100 quarts of milk. D. $0.40 per quart and 60 quarts of milk.