If initially the money supply is $1 trillion, velocity is 5, the price level is 1, and real GDP is $5 trillion, an increase in the money supply to $2 trillion
A) increases real GDP to $10 trillion.
B) causes velocity to fall to 2.5.
C) increases the price level to 2.
D) increases the price level to 2 and velocity to 10.
C
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Which of the following features was prominent in the airline industry during the 1950s?
a. The airlines had to concentrate on cost reduction. b. The airlines had to lower the frequency of flights to meet rising costs. c. The airlines served food prepared by their own employees or by other airlines. d. The airlines industry was revolutionized by low-cost budget airlines.
If the economy in the graph shown is currently at point B, and the government increases its spending, the likely outcome will be that the:
A. economy will increase its level of output.
B. economy will experience deflation.
C. economy's unemployment rate will increase.
D. All of these are likely to be true.
Over the last 50 years or so, the rate of growth of average working hours has been mostly negative
a. True b. False
Exhibit 2-9 Production possibilities curve
If the economy represented in Exhibit 2-9 is operating at Point W:
A. no tractor product must be forgone to produce more food in the current period. B. resources are not fully used. C. some tractor production must be forgone to produce more food in the current period. D. increased food production would be impossible.