"If the money supply rises by $1 billion, GDP will rise until it alone increases the quantity of money demanded by $1 billion." This describes the situation when
A) an IS curve shifts against a horizontal LM curve.
B) an IS curve shifts against a vertical LM curve.
C) a vertical LM curve shifts against an IS curve.
D) a horizontal LM curve shifts against an IS curve.
C
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The change in the price of one good has no effect on the quantity demanded of another good. These goods are:
A) complements. B) substitutes. C) both inferior. D) both Giffen goods. E) none of the above
The quantity equation states that the
A) money supply divided by the velocity of money equals the price level divided by real output. B) money supply times the velocity of money equals the price level times real output. C) money supply times the price level equals real output divided by the velocity of money. D) money supply times the price level equals real output times the velocity of money.
The inputs into the process of production are called factors of production.
Answer the following statement true (T) or false (F)
When demand for a product increases but the supply of the product remains unchanged, the equilibrium price of the product will
a. rise and equilibrium quantity will decrease. b. fall. c. first fall and then return to the original level. d. rise, and equilibrium quantity will increase.