Suppose the public holds $200 billion in M2 and the velocity of the M2 money supply is 5. What is the value of nominal GDP?
A) $500.
B) $1,000.
C) $1,500.
D) That information cannot be determined.
Ans: B) $1,000.
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A common definition of a recession is a period of time
A) of at least 6 months during which real GDP decreases. B) with an increase in real economic output from the previous period. C) with no change in real GDP. D) with no change in the dollar (money) value of economic output.
If a given value of x is associated with a particular value of y,
a. then x causes y b. then y causes x c. then x and y must be logically connected d. there are no other variables that affect the value of y e. there may be no causal relationship between x and y
The circular flow of economic activity is a model of the: a. flow of goods, services, and payments between households and firms. b. influence of government on business behavior
c. role of unions and government in the economy. d. interaction among taxes, prices, and profits.
In the 1970s, the Organization of Petroleum Exporting Countries (OPEC) tripled the price of petroleum, causing automobile manufacturers to look for ways to produce more fuel-efficient cars by substituting aluminum and plastic for steel. This was primarily a response to the economic question of:
A) When will each good be produced? B) For whom shall the goods be produced? C) What goods and services should a society produce? D) How should goods and services be produced?