Suppose at present people hold a quantity of money equal to 85% of nominal GDP. What happens to velocity if people wish to increase their money holdings to 80% of nominal GDP?
A) Velocity can increase or decrease depending on people's tastes and preferences toward money.
B) Velocity is unaffected.
C) Velocity increases.
D) Velocity decreases.
Ans: C) Velocity increases.
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If a significant portion of firms in the economy does not immediately adjust product prices, then the short-run aggregate supply curve
A) slopes downward. B) slopes upward. C) is horizontal. D) is vertical.
If inputs into production cannot be substituted for each other but have to be employed in fixed proportions, isoquants are straight, downward-sloping lines
Indicate whether the statement is true or false
Those economists who do not believe there is anything inherently wrong with monopolies advocate a policy of
a. laissez-faire b. marginal cost pricing c. antitrust d. patent control e. nationalization
If the price of good X falls and the demand for good X is unit elastic, then the percentage rise in quantity demanded is __________ the percentage fall in price, and total revenue __________.
A) greater than; rises B) less than; falls C) equal to; remains constant D) greater than; falls E) less than; rises