The equation of exchange states that the relationship among the money supply (M), the price level (P), the velocity of money (V) and real output (Y) is
a) MP = VY
b) M/P = YV
c) PV = MY
d) MV = PY
e) Y/V = MP
d) MV = PY
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The government sector balance is equal to ________
A) net taxes minus government purchases of goods and services B) tariffs minus imports C) saving minus investment D) exports minus imports
When economists say an individual has made a rational choice, they mean the individual has
a. made the choice by weighing their own subjective costs and benefits. b. made a "good" decision, one that reasonable outside observers would have also made. c. neglected to consider the unintended consequences arising from their decision. d. ignored their own personal interests and made the choice that is best for society.
Which of the following is not correct?
a. Some states in the U.S. mandate minimum wages above the federal level. b. Most European nations have minimum-wage laws. c. The U.S. minimum wage is significantly higher than the minimum wages in France and the United Kingdom. d. The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline