According to the quantity theory of money, deflation will occur if the
A) money supply is less than real GDP.
B) money supply is more than real GDP.
C) money supply grows at a slower rate than real GDP.
D) money supply grows at a faster rate than real GDP.
Answer: C
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Suppose Ford Motor Company issues a 5% bond with a stipulation that if a national index of SUV sales drops by 10%, then Ford can decrease the coupon rate to 3%. This security is called a
A) credit option. B) credit swap. C) credit-linked note. D) credit default swap.
All welfare programs are means-tested income transfers
Indicate whether the statement is true or false
Vito attends college and works part-time job as a waiter. He can work up to 40 hours each week at his job, which pays $8 per hour. The table below shows his utility from different levels of leisure and income. Vito is currently working 20 hours per week. If Vito decides to work 30 hours instead, what will be his marginal utility loss from having less leisure?
a. 34
b. 24
c. 10
d. 18
Which of the following is a nonmarket good?
A) the corn you grow in your home garden and consume B) the clothes you sew and sell to a neighbor who pays you by writing you a check C) the self-portrait hanging in your den D) a and c E) a, b, and c