Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true?
a. Mutually beneficial trade between Karl and Adam could take place at an exchange rate of 1 ton of apples to 1 1/2 ton of oranges.
b. Mutually beneficial trade between Karl and Adam could take place at an exchange rate
of 1 ton of oranges to 1 1/2 ton of apples.
c. both a. and b. are true.
d. neither a. nor b. are true.
c
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If the inflation rate increases,
A) the real interest rate rises. B) real GDP growth increases. C) potential GDP increases. D) the nominal interest rate falls. E) the velocity of circulation increases.
The table above gives the aggregate demand and aggregate supply schedules in Lotus Land
With no changes in aggregate demand or long-run aggregate supply, in long-run macroeconomic equilibrium, the price level will be ________ and real GDP will be ________. A) 120; $400 B) 110; $500 C) 90; $400 D) 100; $600
According to monetary theory, if the money supply is growing at a rate of 5 percent, real GDP is growing at a rate of 2 percent, and velocity is constant, what will the inflation rate be?
What will be an ideal response?
Which of the following is a definition of velocity?
a. Velocity = value of final goods and services produced/money supply b. Velocity = real GDP/M c. Velocity = nominal GDP/real GDP d. Velocity = (P Q)/(M V)