Which of the following is an assumption used by monetarists in establishing the quantity theory of money?
a) real GDP is equal to the multiplicative product of the money supply and the price level
b) the velocity of money is constant
c) households exhibit rational expectations
d) households exhibit money illusion
e) all of the above
b) the velocity of money is constant
You might also like to view...
The dominant factor affecting medical care delivery and finance in the 1980s was
a. the Hill-Burton Act. b. prospective payment for hospitals. c. creation of Medicare and Medicaid. d. the explosive growth of managed care. e. ERISA.
A firm will tend to select the least costly input combination to produce its output
a. True b. False Indicate whether the statement is true or false
If a fair coin is tossed, the probability of coming up with either a head or a tail is:
A. 1/2 or 50 percent. B. Unquantifiable. C. Zero. D. 1 or 100 percent.
If productivity increases as wages increase and firms pay a wage above the market clearing wage, then
A. these firms will go out of business in the long run because they will not be able to compete with firms paying lower wages. B. these firms will have lower profit levels than their competitors. C. these firms will face an excess demand for labor and will be able to hire the best workers in the market. D. a potential benefit these firms may receive is a reduction in employee turnover.