If you believe that velocity is constant and that the aggregate supply curve is horizontal, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of the
a. price level and real output.
b. price level.
c. price level and no change in real output.
d. real output.
d
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The federal budget experienced surpluses from _____
a. 1998 to 2001 b. 2002 to 2006 c. 1970 to 1973 d. 1991 to 1994 e. 1985 to 1988
If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep output stable?
a. Lower its interest rate target b. Sell bonds in the open market c. Wait, since output usually does not change when the money demand curve shifts d. Raise its interest rate target e. Buy bonds in the open market
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. What is the probability of drawing a blue marble in the first game?
A. 20 percent B. 25 percent C. 75 percent D. 50 percent