If M = the money supply; Y = real output, P = the price level, and V = velocity, which of the following equals the velocity of money?
A. (P × Y) + M
B. (P × Y)/M
C. (Y × M)/P
D. (P × M)/Y
Answer: B
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Which of the following is most vital if the firms in an industry are going to earn economic profit in the long run?
a. an inelastic demand for the product produced by the firms b. an elastic demand for the product produced by the firms c. managerial efficiency d. high barriers to entry into the industry
The tax burden will fall most heavily on sellers of the good when the demand curve
a. is relatively steep, and the supply curve is relatively flat. b. is relatively flat, and the supply curve is relatively steep. c. and the supply curve are both relatively flat. d. and the supply curve are both relatively steep.
Sandra uses her sewing machine, thread, and yards of denim to produce jean skirts. The sewing machine is an example of a. labor
b. physical capital. c. human capital. d. natural resources.
Without deficit targeting, a negative demand shock results in a decrease in income, but with deficit targeting, a negative demand shock results in an increase in income.
Answer the following statement true (T) or false (F)