The equation of exchange always holds because
A. the quantity of money is determined by the amount of spending on goods and services.
B. the quantity of money dictates the size of nominal GDP, since money is a social usage.
C. MV measures total spending on GDP and PY also measures of total spending on GDP.
D. the number of times money is spent to obtain goods and services measures total spending on GDP.
Answer: C. MV measures total spending on GDP and PY also measures of total spending on GDP.
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The last time gas prices increased drastically, sales of large Sport Utility Vehicles (SUVs) fell. Why?
A. Higher gas prices lowered the benefit of driving an SUV. B. Higher gas prices increased the cost of driving a SUV. C. Higher gas prices lowered the cost of driving a SUV. D. Higher gas prices increased the benefit of driving an SUV.
The bowed shape of the traditional production possibilities curve reflects the
A) negative side effects of economic growth. B) fact that not all resources are equally well-suited to producing all goods. C) costs of unemployment. D) problems of inequality.
The NBER focuses primarily on the value of real GDP while deciding whether an economic contraction is a recession, because it is measured monthly and allows the identification of the month in which business-cycle turning points occur
a. True b. False Indicate whether the statement is true or false
Policy makers find that creating inflation is much more difficult than creating disinflation because expectations begin to change as inflation takes hold
a. True b. False Indicate whether the statement is true or false