An individual's quantity of money demanded
a. refers to how much money the individual would like to have
b. refers to the amount of money an individual needs to maintain her desired standard of living
c. refers to her wealth constraint
d. refers to the amount of her wealth that an individual chooses to hold in the form of money
e. is virtually unlimited
D
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Fed policies since the 1980s have attempted to
A) overshoot natural real GDP. B) undershoot natural real GDP. C) "stall" the economy whenever natural real GDP is growing too fast. D) A and B. E) none of the above.
Under a system of flexible exchange rates, an increase in the supply of foreign exchange (an increase in the demand for the dollar) will cause the
a. dollar to appreciate. b. dollar to depreciate. c. U.S. trade deficit to decrease. d. U.S. inflation rate to increase.
A certain production possibilities frontier shows production possibilities for two goods, jewelry and clothing. Which of the following concepts cannot be illustrated by this model?
a. the flow of dollars between sellers of jewelry and clothing and buyers of jewelry and clothing b. the tradeoff between production of jewelry and production of clothing c. the opportunity cost of clothing in terms of jewelry d. the effect of economic growth on production possibilities involving jewelry and clothing
Ben's nominal annual income in 2009 was $40,000. If the rate of inflation is constant at 10 percent, in order to keep Ben's real income constant, his nominal income in the year 2010 should be:
A. $50,000. B. $44,000. C. $40,000. D. $36,000.