In symbols, the equation of exchange says
A) MP = QV.
B) MQ = PV.
C) MV = PQ.
D) MP = MQ.
C
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Does the figure above illustrate a recessionary or an inflationary gap? What do potential GDP and real GDP equal? What is an appropriate fiscal policy to restore real GDP to potential real GDP?
What will be an ideal response?
You observe that an increase in the price of salsa decreases the demand for tortilla chips and increases the demand for potato chips. You can conclude that
A) salsa and tortilla chips are substitutes. B) salsa and potato chips are complements. C) tortilla chips and potato chips are complements. D) salsa and tortilla chips are complements.
In the short run, a profit-maximizing firm will shut down if its total revenue is greater than its variable costs
Indicate whether the statement is true or false
If people in the United States buy more of a foreign good when its price falls, then
A) the demand curve for U.S. dollars will slope up. B) the supply curve for U.S. dollars will slope up. C) the exchange rate will increase when there is inflation. D) fixed exchange rates will make foreign exchange markets more efficient.