In the equation of exchange, the concept that provides the link between M and PY is called
A) the velocity of money.
B) aggregate demand.
C) aggregate supply.
D) the money multiplier.
A
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What is the motivation for individuals to hold money?
A) to facilitate transactions B) to reduce risk C) to have liquidity D) all of the above
Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is
A) $1000. B) positive. C) negative. D) zero.
If the inflation rate falls and nominal interest rates are unchanged,
A) inflation will fall. B) inflation will continue at the same rate. C) real interest rates rise. D) real interest rates are unaffected. E) real interest rates fall.
A firm with market power
A. faces a downward-sloping demand curve. B. can increase price without losing all sales. C. is the only seller in a market. D. both a and b E. all of the above