In the mid-1980s, velocity "fell off the rails," growing much slower than its historical trend of 3.4 percent. Had the Fed assumed a constant growth rate of 3
4 percent and maintained a constant growth rate of money supply rather than increasing the growth rate of the money supply as it did, A) nominal GDP would have grown more slowly as would real GDP.
B) nominal and real GDP would have grown more rapidly.
C) nominal GDP would have grown more rapidly faster and GDP would have grown more slowly.
D) real GDP would have grown more rapidly faster and nominal GDP would have grown more slowly.
A
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If there is a surplus of motorcycles how will the equilibrium point change?
A) The equilibrium point will move from A to E. B) The equilibrium point will move from A to B. C) There will be no change in the equilibrium point. D) The equilibrium point will move from A to C.
Isabella is contemplating investing $10,000 in an investment. It is expected to yield $4,000 at the end of each of the next three years. The interest rate is 5 percent. What is the net present value of the expected revenues from the investment?
a. $8,426 b. $9,947 c. $10,893 d. $12,000
When a tax is placed on the buyers of a product, buyers pay
a. more and sellers receive more than they did before the tax. b. more and sellers receive less than they did before the tax. c. less and sellers receive more than they did before the tax. d. less and sellers receive less than they did before the tax.
Economies of scale can be caused by all of the following except:
A. price discounts for large scale purchases. B. labor specialization. C. use of more productive equipment. D. increases in the firm's average total cost.