If nominal gross domestic product is $3,600 billion and the money supply is $900 billion, the velocity of money is _____
a. 25
b. 13.5
c. 4
d. 0.33
c
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Suppose a bank has $200,000 in deposits and a reserve ratio of 15 percent. Its required reserves are
A) $350. B) $1,500. C) $3,000. D) $30,000.
According to the assumptions of the quantity theory of money, if the money supply increases by 5 percent, then
a. nominal and real GDP would rise by 5 percent. b. nominal GDP would rise by 5 percent; real GDP would be unchanged. c. nominal GDP would be unchanged; real GDP would rise by 5 percent. d. neither nominal GDP nor real GDP would change.
In a competitive market, one would expect to see
A) no advertising. B) false advertising. C) advertising only in the Sunday papers. D) minimal advertising.
In the short run, the profit-maximizing monopolistically competitive firm will produce the rate of output at which
A) P = MC. B) MR = MC. C) P = ATC. D) MR = ATC.