According to classical economists, in the quantity theory of money,
a. the price level is strictly a function of the supply of money
b. the supply of money is strictly a function of the price level
c. if output is constant, an increase in the quantity of money will cause the price level to fall
d. the money supply and the price level are inversely related
e. the money supply is controlled by the government which is why we have had moderate (and sometimes more than moderate) inflation
A
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During the 1990s, Japan's economy experienced
A) a tripling of values in the stock market. B) negligible inflation and unemployment rates. C) falling short-term interest rates. D) All of the above.
If there is a sole producer of a good, and he faces no threat of competition, it is likely that:
A. government intervention will have no impact on the market. B. government intervention will raise prices to consumers. C. government intervention will increase total surplus. D. government intervention will make things better for buyers and sellers.
In a recession, demand for cars falls, and the demand curve in the market for cars
A. shifts to the right. B. shifts to the left. C. remains unchanged. D. slows down.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.