Given: M = 500, V = 9, P = 10, Q = 450. According to the crude quantity theory of money, if M rises to 700, how much would V, P, and Q be?
What will be an ideal response?
P would rise (by 40 percent) to 14; V would remain at 9; Q would remain at 450.
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Cyrus McCormick is best known for
a. manufacturing the mechanical reaper. b. developing hybrid strains of corn. c. introducing chemical fertilizers. d. the invention of the single-horse plow.
If the MPC = 0.75, MPS must be _______ and the income multiplier is _______
a. 0.25; 4 b. 0.25; 5 c. 0.75; 5 d. 1.50; 5 e. 4; 0.25
If potential output exceeds actual output, the aggregate demand curve shifts downward over time.
Answer the following statement true (T) or false (F)
In the traditional Keynesian model, if the government increases government spending,
A. the C + I + G + X line will shift down and the aggregate demand curve will shift to the left. B. the C + I + G + X line will shift down but the aggregate demand curve will not shift. C. the C + I + G + X line will shift up but the aggregate demand curve will not shift. D. the C + I + G + X line will shift up and the aggregate demand curve will shift to the right.