The quantity theory of money implies that an increase in the money supply will ultimately:
A. affect only the level of real GDP; the price level will remain unchanged.
B. increase the price level and leave real GDP unchanged.
C. increase the price level and the level of real GDP.
D. decrease the price level and the level of real GDP.
Answer: B
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A government-imposed price floor has what effect on efficiency?
A. Consumer surplus increases. B. There is little dead weight loss. C. Consumer and producer surplus increases. D. Producer surplus increases.
Price cap regulation is a
A) price ceiling. B) price floor. C) form of marginal cost regulation. D) type of rate of return regulation.
In recent years, a monetary growth rule has fallen out of favor because
A) the close relationship between movements in M1 and movements in real GDP has become weaker. B) it is believed that active monetary policy destabilizes the economy and makes the business cycle worse. C) the growth rate of GDP has been highly unstable. D) the growth rate of M1 has become more stable.
The amount of a good that is given up to produce another good is:
a. its dollar cost. b. its opportunity cost. c. its relative cost. d. its absolute cost. e. all of these.