Suppose real money demand is 400, real output is 16,000, and the price level is 150. What is the level of velocity in this economy?
A. 4,000
B. 6,000
C. 400
D. 40
Answer: D
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Financial capital is highly volatile, and technological advances have reinforced this volatility
Indicate whether the statement is true or false
________ in the money supply creates excess ________ money, causing interest rates to ________, everything else held constant
A) A decrease; demand for; rise B) An increase; demand for; fall C) An increase; supply of; rise D) A decrease; supply of; fall
Assume that Paris First National Bank is a thriving bank with deposits of $20 million. If the required reserve ratio is 20 percent and the bank is fully loaned out, the bank will keep what amount of required reserves?
a. $2 million. b. $4 million. c. $10 million. d. $16 million. e. $20 million.
An inflationary gap will exist when the full employment level of GDP is
a. equal to equilibrium GDP. b. greater than equilibrium GDP. c. less than equilibrium GDP. d. greater than disposable income.