The equation of exchange is an ________ while the quantity theory of money is a theory that ________.
A. accounting identity; assumes velocity is held constant
B. accounting theory; economists use to explain changes in real Gross Domestic Product (GDP)
C. accounting identity; assumes the money supply is constant
D. accounting theory; assumes the price level is constant
Answer: A
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Two students are assigned a group project. Each has the option to work or not work to achieve a high grade. The payoffs are shown in the above table. Student 1 should
A) work only if student 2 works. B) work regardless of the decision made by student 2. C) not work if student 2 works. D) not work regardless of what student 2 decides.
Lionfish is an aquatic invasive species in the southeastern U.S. and the Caribbean. Current removal policies focus on harvesting the lionfish for human consumption
Assuming that lionfish is a substitute for snapper, what will likely happen to fishing efforts for lionfish if the price of snapper increases? A) Fishing efforts will increase. B) Fishing efforts will decrease. C) Fishing efforts will remain the same if supply is perfectly inelastic. D) A and C.
The portion of the marginal cost curve above the minimum point on the average variable cost curve is part of the perfectly competitive firm's
a. average revenue curve b. effective demand curve c. average variable cost curve d. supply curve e. total revenue curve
Answer the following statement(s) true (T) or false (F)
1. Non-equilibrium prices in the private sector often last for a long period of time. 2. A price floor is a legally established minimum price. 3. Price ceilings cause persistent surpluses. 4. Price floors set below the market clearing price distort price signals and incentives to producers and consumers.