When the Fed sells securities through open market operations, the equation of exchange (under monetarist assumptions about V being stable) requires that either aggregate spending
A. Or prices increase, or both.
B. Or prices decrease, or both.
C. Decreases or prices increase, or both.
D. Increases or prices decrease, or both.
Answer: B
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The asset demand for money is related to the function of money called
A) medium of exchange. B) standard of deferred payment. C) store of value. D) unit of account.
A firm has an average total cost of $50. If it sells 20 units of its product at $80 each, what is its profit?
A) $30 B) $600 C) $1,000 D) $1,600
It is efficient to increase the output of computers if
a. society considers the extra computers more valuable than other goods foregone to produce the computers. b. the opportunity cost of more computers is greater than their marginal utility. c. computer production can be increased only if production of other goods is decreased. d. the price of the computers is equal to their average cost.
A price floor set above the equilibrium price is binding
a. True b. False Indicate whether the statement is true or false