The quantity theory of money assumes that the velocity of money:
A. is constant.
B. will rise if the money supply rises and fall if the money supply falls.
C. will rise if the money supply rises, but it will not change if the money supply falls.
D. will fall if the money supply rises, and it will rise if the money supply falls.
Answer: A
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If the products of two firms are homogeneous, then they
A. Are perfect substitutes. B. Are costless to produce. C. Must be used together. D. Differ from each other.
Answer the following questions true (T) or false (F)
1. Direct finance refers to the flow of funds from savers to borrowers through financial markets. 2. The interest payment on a bond is called a face value payment. 3. The higher the default risk on a bond, the higher the interest rate will be.
Government can raise GDP by $1,000 billion by
A. raising government purchases B. reducing taxes C. increasing transfer payments D. all of the above
Summarize how the law of supply explains the effects of price on the quantity supplied
What will be an ideal response?