If an economy produces 2,500 units of output with a money supply of $500 and a velocity of 10, we know the price level must be:
A. $1.
B. $5.
C. $2.
D. $10.
C. $2.
You might also like to view...
The practice of spreading one's wealth over a variety of different financial investments in order to reduce overall risk is called:
A. diversification. B. following the risk premium. C. allocation. D. risk reservation.
If people increase their rate of time preference
A) more credit is made available in the banking system. B) less credit is made available in the banking system. C) the demand for credit shifts left. D) the supply of credit shifts right.
Refer to Figure 12-15. Assume that the medical screening industry is perfectly competitive and that some firms are making short-run losses
Suppose the medical screening industry runs an effective advertising campaign which convinces a large number of people that yearly CT scans are critical for good health. Which of the diagrams in the figure best describes what happens in the industry? A) Panel A B) Panel B C) Panel C D) Panel D
During the financial crisis of 2008-2010, the Fed increased its purchases of securities and extended more loans, which caused the monetary base to
a. increase rapidly, but the M1 money supply declined because the banks loaned out most of the additional reserves to businesses. b. fall, but the M1 money supply still expanded rapidly because the banks increased their loans to businesses. c. increase rapidly, but the M1 money supply expanded at a much slower rate because the banks enlarged their excess reserves. d. fall, and this led to a sharp decline in the M1 money supply.