If the money supply is $900, velocity is 6, then in the equation of exchange, PQ is
A) $150.
B) $1,500.
C) $2,400.
D) $3,600.
D
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When price is less than average variable cost at the profit-maximizing level of output, a firm should:
A) continue to produce the level of output at which marginal revenue equals marginal cost if it is operating in the short run. B) continue to produce the level of output at which marginal revenue equals marginal cost if it is operating in the long run. C) shutdown, because it will lose nothing in that case. D) shutdown, because it cannot even cover all of its variable costs let alone its fixed costs if it stays in business.
Which of the following is a true statement about real and nominal GDP?
A) If nominal GDP increases from one year to the next, we know that production of goods and services has risen. B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. C) Increases in average prices do not affect the calculation of nominal GDP. D) If real GDP increases from one year to the next, we know that production of goods and services has risen.
An open-market ________ of securities by the Fed results in a decrease in reserves and a decrease in the ________ money.
A. sale; supply of B. purchase; supply of C. sale; demand for D. purchase; demand for
Refer to the diagram below. If box E represents government, box C businesses, and box A households, then flows (11) and (12) would represent:
A. Goods and services
B. Government expenditures
C. Resources
D. Net taxes