In order to consider the equation of exchange an economic model, what must we assume?
A. Real GDP is a constant value.
B. Changes in GDP cause changes in the money supply.
C. The money supply is constant.
D. Changes in velocity are small and predictable.
Answer: D
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A major distinction to be made is that deficits count government spending shortfalls ___________, and public debt counts _______________.
A. in a year; the total amount owed from all years B. from all years; the total from a single year C. in real terms; in nominal terms D. as a percentage of GDP; in nominal terms
A college student decides to spend the afternoon watching three movies rented from Red Box. The cost of each movie is $1. The student was willing to pay $4 to rent each of the first two movies and $2 to rent the third movie. What was the marginal benefit received by the student when renting the 1st movie?
A. $4 B. $8 C. $1 D. $2
If the government adopts expansionary monetary policy during a recession, ________
A) tax rates increase B) government spending falls C) access to credit increases D) interest rates increase
In the wake of the Reagan "supply-side" tax cuts of the early 1980s, growth in the labor-force participation rate ________ and the personal saving rate ________
A) increased, rose B) increased, fell C) decreased, rose D) decreased, fell