Nominal GDP is proportional to money stock when
a. velocity of money is volatile.
b. velocity of money is constant.
c. there are major changes in the value of velocity of money.
d. velocity of money is zero.
b
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Suppose the price of beef declines by $0.50 per pound at the supermarket. Consumers of beef immediately increase their purchases of beef. This illustrates:
a. the fact that beef is an inferior good. b. the cross-elasticity effect of a price decrease. c. the substitution effect of a price decrease. d. the fact that beef is an economic bad. e. the income effect of a rise in price.
Which of the following was an underlying cause of the economic crisis of 2008?
a. a failure of government to impose regulations on Fannie Mae, Freddie Mac, and other mortgage lenders b. the imposition of government regulations on Fannie Mae, Freddie Mac, and other lending institutions that eroded the conventional lending standards in place prior to the mid-1990s c. greedy mortgage lenders who extended risky loans to sub-prime borrowers even though the regulators were trying to limit these loans d. federal housing regulations that made it difficult for Fannie Mae, Freddie Mac, and other lending institutions to obtain sufficient loanable funds for the finance of housing construction
In discussing market failure, what term do economists use to describe an economy that has produced too much?
a. ultraspecialization b. high efficiency c. distribution of income d. overallocation
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a lower long-run price, we know that
A. some firms will be losing money in the long run. B. this is an increasing-cost industry. C. this is a decreasing-cost industry. D. after further adjustments, price will rise to its original level.