In order to consider the equation of exchange an economic model, what must we assume?
a. Real GDP is a constant value.
b. Changes in GDP cause changes in the money supply.
c. The money supply is constant.
d. Changes in velocity are small and predictable.
d
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The economy experiences both inflation and unemployment when
A. aggregate demand decreases and aggregate supply remains unchanged. B. aggregate demand increases and aggregate supply decreases. C. aggregate demand decreases and aggregate supply increases. D. aggregate supply decreases and aggregate demand remains unchanged.
The return that the entrepreneur can obtain in the best alternative business is called the
A) normal profit. B) economic profit. C) marginal profit. D) marginal revenue.
Which of the following is (are) linked to (an) adverse supply shock(s)?
A) the terrorist attacks of 2001 B) collective bargaining that followed the termination of U.S. wage and price controls in 1973 C) the corporate scandals of 2002 D) all of the above E) none of the above