Control of money growth to stabilize inflation only works if velocity were constant. In practice, changes in velocity:
A. must be taken into account no matter what the inflation rate.
B. can safely be ignored in countries with relatively low inflation rates.
C. can always safely be ignored.
D. are important when inflation is low.
Answer: D
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If gasoline prices rise by 20% and quantity demanded falls by 5%., then the price elasticity of demand is:
A) .05. B) .15. C) .20. D) .25. E) .40.
The interest rate thought to have the most important impact on aggregate demand is the
A) short-term interest rate. B) T-bill rate. C) rate on 90-day CDs. D) long-term interest rate.
Risk is:
A. when the costs or benefits of an event or choice are uncertain. B. why the changing value of money is such a challenge. C. to always be avoided, at any cost. D. None of these statements is true.
The shutdown point is also referred to as the breakeven point
a. True b. False Indicate whether the statement is true or false