Answer the following statement(s) true (T) or false (F)
1.If the Fed pursues a expansionary monetary policy on the open market, then U.S. exports will most likely decrease.
2.With the velocity of money, V represents the average number of times that each dollar is used in purchasing final goods or services in a one-year period.
3.According to the equation of exchange, the value of goods purchased is more than the value of goods sold.
4.The quantity theory of money and prices is the hypothesis that changes in the money supply lead to equal proportional changes in the price level.
5.The time lag is typically longer for adopting monetary policy changes than fiscal policy changes.
1.false
2.true
3.false
4.true
5.false
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What is the economic reasoning behind the proposal to legalize drugs?
A. Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign producers of the drugs. B. All forms of government restrictions on behavior are immoral and ought to be removed. C. Legal drugs will be much cheaper than illegal drugs, which will reduce incentive for crime to obtain money for drugs and to protect drug “businesses.” D. Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price. E. Dealing with supply is always easier than dealing with demand, and legalization accomplishes that.
In the figure above, suppose the economy is initially at point B. Then the interest rate in Japan rises relative to the interest rate in the United States. This change ________ the supply of dollars and the market moves to a point such as ________
A) decreases; A B) decreases; E C) increases; D D) increases; C
The demand for capital is similar to the demand for labor in that
A) both are inelastic at high prices and elastic at low prices. B) both are derived demands. C) the marginal product of labor is derived from the marginal product of capital. D) the marginal revenue product curve for labor is the same as the marginal revenue product curve for capital.
Which of the following is not evidence of the lower standard of living among less-developed countries?
a. High per capita real GDP. b. High percentage of households headed by females. c. High infant mortality rate. d. Low life expectancy. e. High birth rate.