Which of the following best describes the relationship between the velocity of money and the demand for money?
a. The demand for money is not related to the velocity of money.
b. When the demand for money increases, the velocity of money increases.
c. The demand for money must be stable for the velocity of money to increase.
d. When the demand for money declines, the velocity of money increases.
D
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Discuss the effects of an unexpected decrease in the inflation rate policy on unemployment in the short run. If the reduction in inflation is permanent, what happens in the long run?
What will be an ideal response?
If in the market for apples the supply has decreased, then
A) the supply curve for apples has shifted to the right. B) there has been a movement upwards along the supply curve for apples. C) there has been a movement downwards along the supply curve for apples. D) the supply curve for apples has shifted to the left.
With a partial trade agreement
A) goods and services are allowed to cross boundaries without tariffs. B) two or more countries agree to liberalize trade in a selected group of categories. C) two or more countries set common tariffs toward non-members. D) two or more countries allow the free mobility of inputs such as labor and capital. E) two or more countries agree on establishing a common currency.
Assume that a college student purchases only diet soda and potato chips. The substitution effect associated with a decrease in the price of a potato chips will result in
a. an increase in the consumption of diet soda only. b. a decrease in the consumption of diet soda only. c. an increase in the consumption of potato chips and a decrease in the consumption of diet soda. d. a decrease in the consumption of potato chips and an increase in the consumption of diet soda.