Institutionally-focused economists argue:
A. the equation of exchange is incorrect.
B. the equation of exchange should be read from left to right.
C. the equation of exchange should be read from right to left.
D. both the quantity theory and the equation of exchange are incorrect.
Answer: C
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If neither the demand nor supply of a good is perfectly elastic or inelastic, a tax on the good ________ consumer surplus and ________ producer surplus
A) decreases; decreases B) increases; increases C) decreases; increases D) increases; decreases E) decreases; does not change
Real wages will decline if
A) money supply growth exceeds expectations. B) real interest rates rise. C) aggregate demand exceeds aggregate supply. D) money supply growth exceeds the inflation rate.
Suppose the bank has a 10% reserve requirement, $5000 in deposits, and has loaned out all it can, given the reserve requirement
A. It has $500 in reserves and $4500 in loans B. It has $50 in reserves and $4950 in loans C. It has $555 in reserves and $4445 in loans
An example of a transaction that will be a surplus item on the U.S. balance of payments is
A) the purchase of General Motors stock by a German resident. B) the purchase of a Mercedes-Benz by an American. C) a Nissan plant in Tennessee buying parts from the main plant in Japan. D) a gift of wheat from the United States government to Egypt.