The crude quantity theory of money assumes that
A. V and Q remain constant.
B. V and Q vary.
C. V is constant and Q varies.
D. Q is constant and V varies.
A. V and Q remain constant.
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In Macroland there is $1,000,000 in currency that can either be held by the public as currency or deposited into banks. Banks' desired reserve/deposit ratio is 10%. If the public of Macroland decides to hold more currency, increasing the proportion they hold from 50% to 75%, the money supply in Macroland will ________.
A. increase. B. either increase or decrease. C. decrease. D. remain the same.
The job finding rate is defined as
A) the probability that someone who has been unemployed for over a year will find a job in the next month. B) the probability that someone who is not in the labor force will enter the labor force in the next month. C) the probability that someone who is employed will change jobs in the next month. D) the probability that someone who is unemployed will find a job in the next month.
Why is the fear of expropriation an obstacle to economic growth?
a. Without research and development, no technological advances can be made. b. Large government spending causes negative externalities. c. Powerful special interest groups have too much control. d. No foreign investment comes to the country, because of the lack of guarantees. e. The fear of expropriation causes too many resources to be devoted to military spending which is a highly unproductive sector.
The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent. B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent. C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent. D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.