The institutionalist theory of inflation differs from that of the quantity theory by focusing on:
A. the rate of growth in the money supply.
B. how firms determine wages and prices.
C. the institutions that influence how the money supply is determined.
D. the equation of exchange.
Answer: B
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A general medium of exchange tends to
A) reduce transaction costs. B) make bartering more effective. C) reduce the incentive to specialize and pursue one's comparative advantage. D) accomplish all of the above. E) accomplish none of the above.
An inferior good is a good whose quantity demanded
A. rises when its price falls. B. falls when the price of a related good falls. C. falls when the consumer’s total utility rises. D. rises when the consumer’s real income falls.
When consuming a good creates positive externalities,
a. private demand increases b. private demand decreases c. the private demand curve overstates the marginal social benefit of the good d. the private demand curve understates the marginal social benefit of the good e. the equilibrium quantity increases without government intervention
In an open economy, the real level of U.S. exports and the quantity of RGDP demanded ______ the price level
a. Move in the same direction as b. Move in the opposite direction from c. Are not affected by d. Have an indeterminate relationship with