In the equation of exchange, velocity of money increases when
a. Y increases without any changes in P and M.
b. Y falls without any changes in P.
c. M increases without any changes in P and Y.
d. P falls without any changes in Y and M.
a
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If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the money supply is ________ billion
A) $10,000 B) $4000 C) $1400 D) $10,400
Which of the following statements best describes why we cannot be assured that bureaucrats who believe in the mission of their bureaus will always act in the public interest?
a. Logrolling among members of Congress ties the hands of the bureaucracy, preventing them from acting in the public interest. b. Bureaucrats do not personally benefit from larger budgets, but if they care about the mission of the bureau they will personally gain from acting in the public interest. c. Free riding on the work of other within the bureau will make acting in the public interest impossible. d. Self-interest is a powerful motivator, regardless of whether an individual operates in the public or private sector.
Which of the following is NOT a key assumption of the classical model?
A) There is a single monopoly seller in many markets for goods and services. B) People cannot be fooled by money illusion. C) People are motivated by self-interest. D) Wages and prices are flexible.
In the capital market, the purchase price is what a:
A. producer pays to gain permanent ownership of a factor of production. B. consumer pays to use labor or land services for a certain period or task. C. consumer pays to gain permanent ownership of a factor of production. D. producer pays to use a factor of production for a certain period or task.