Cutting the money supply by one-third is predicted by the quantity theory of money to cause
A) a sharp decline in real output of one-third in the short run, and a fall in the price level by one-third in the long run.
B) a decline in real output by one-third.
C) a decline in output by one-sixth, and a decline in the price level of one-sixth.
D) a decline in the price level by one-third.
D
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Transaction costs are
A) all unnecessary and wasteful costs. B) any nonmonetary costs associated with a transaction. C) not real costs because they make no positive contribution to economic transactions. D) the costs of arranging agreements between demanders and suppliers. E) the opposite of opportunity costs.
An airline's flight is about to take off. It has a few empty seats left aboard. If it lowers its prices, it can fill the remaining seats and fly at full capacity. What should be done?
a. Sell the additional standby seats at a discount since the marginal costs of the additional passenger are almost zero and fly at full capacity b. Sell the additional standby seats without a discount c. Don't offer the additional seats for any price d. none of the above
Which if the following is the best example of a public good?
a. Bread. b. Fish in the ocean. c. Scrambled satellite broadcasts. d. National defense.
Under perfect competition, the average revenue curve of the firm coincides with its average cost curve
a. True b. False Indicate whether the statement is true or false