Under the Bretton Woods system, U.S. dollars were redeemable for ________ only if the dollars were presented by a foreign central bank
A) silver B) gold
C) foreign currency D) U.S. Treasury bonds
B
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If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 3 percent, then in the long run the inflation rate is
A) 0 percent. B) 6 percent. C) -3 percent. D) -6 percent. E) 3 percent.
Refer to Figure 10.1. Suppose that the government decides to limit monopoly power with price regulation. If the government sets the price at the competitive level, it will set the price at ________
A) P1 B) P2 C) P3 D) P4 E) none of the above
The substitution bias in the CPI refers to the failure of statisticians to:
A. take into account new products purchased by consumers. B. take into account improvements in goods and services. C. allow for the possibility that consumers switch from products whose prices are rising. D. allow for the possibility that consumers switch stores at which they shop.
Suppose one knows two facts: first, the market for prescription drugs experiences chronic shortages and second, the government sets the price for prescription drugs. One can conclude that the government has:
A. set the price below the equilibrium price. B. set the price too high. C. set the price above the equilibrium price. D. encouraged buyers to hoard prescription drugs.