If we assume that velocity is constant, and if the money supply increases by 5 percent, we would expect, ceteris paribus, that the price level would
A. increase by 5 percent.
B. decrease by 5 percent.
C. increase by 1 percent.
D. decrease by 1 percent.
Answer: A
You might also like to view...
Ignoring any supply-side effects, when taxes are hiked, real GDP ________ and the price level ________
A) increases; rises B) decreases; rises C) increases; falls D) decreases; does not change E) decreases; falls
Refer to Figure 4.3. Which diagram most likely represents the indifference map for Sony PlayStations and Nintendo GameCubes?
A. A
B. B
C. C
D. D
It is not true of economic profits that they
A. are a reward for bearing risks. B. are generally greater than accounting profits. C. are zero in a competitive market. D. are difficult to measure.
The primary responsibility of the Federal Open Market Committee (FOMC) is:
A. handling the Fed's collection of checks and adjusting legal reserves among banks. B. issuing currency and acting as the fiscal agent for the federal government. C. supervising bank operations to make sure they follow regulations and monitoring banks for fraud. D. setting the Fed's monetary policy and directing the buying and selling of government securities.