If the nominal money supply grows 5%, real income falls 2%, and the income elasticity of money demand is 0.8, then the inflation rate is
A) 3.0%.
B) 3.4%.
C) 6.6%.
D) 7.0%.
C
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The equilibrium exchange rate is 0.70 euros per dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 trillion a day. If the exchange rate is now 0.60 euros per dollar, then
A) there is a shortage of dollars and the exchange rate rises. B) there is a shortage of dollars and the exchange rate falls. C) there is a surplus of dollars and the exchange rate rises. D) there is a surplus of dollars and the exchange rate falls. E) there is no change.
Over the twentieth century, growth in per-capita GNP was highest
A) immediately prior to the Great Depression. B) during World War II. C) during the 1960s. D) during the 1980s.
Microeconomics is concerned with the study of
A) the effects of inflation. B) the effects of government spending. C) the effects on individual producers of higher wages paid to workers. D) aggregates.
The greater the risk associated with a particular outcome, the ________ likely they will purchase insurance, and the ________ money they are willing to pay for the insurance.
A) more; more B) less; more C) less; less D) more; less