Which of the following is not one of the assumptions of the quantity theory of money?
A. Real output is independent of the money supply.
B. Causation goes from money supply to prices.
C. Velocity is constant.
D. The money growth rate is constant.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
NetJets, which is the first time-share program for aircraft, cuts transaction costs by:
a. providing economic service to its passengers. b. being responsible for crews, maintenance, and compliance with Federal regulation. c. reducing the time taken for traveling between destinations. d. allowing owners to transfer their shares, change the size of their shares, and purchase shares of other planes.
Hedonic pricing is
A) the way that luxury goods are priced in a market economy. B) the tendency for the inflation rate to rise by greater and greater amounts. C) the tendency for nominal GDP to rise when the price level rises. D) the process of translating nominal GDP into real GDP. E) the process of pricing individual characteristics of a good or service.
Low standards reduce production costs and change a nation's comparative advantage
Indicate whether the statement is true or false