If M = quantity of money, V = velocity of money, P = price level, and Q = the quantity of output, then the equation of exchange will be defined as:
a. MV = PQ
b. MQ = PV
c. MP = VQ
d. MV = P/Q
e. MQ = V/P
a
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Use the following diagram in which S is the market supply curve and S1 is a supply curve comprising all costs of production, including external costs, to answer the question below.
Assume that the number of people affected by these external costs is large. If the government wishes to establish an optimal allocation of resources in this market, it should
A. tax producers so that the market supply curve shifts leftward (upward). B. subsidize consumers so that the market demand curve shifts leftward. C. not intervene because the market outcome is optimal. D. subsidize producers so that the market supply curve shifts leftward (upward).
In the model of monopolistic competition, trade costs between countries will cause domestic and foreign markets to have ________ prices, ________ quantities sold, and ________ profit levels
A) different; different; different B) identical; different; different C) different; different; identical D) identical; different; identical E) identical; identical; different
Marginal revenue product is defined as the extra:
a. output a firm would receive after hiring one more unit of resource. b. cost of hiring one more unit of resource c. revenue earned by selling one more unit of product. d. revenue earned by hiring one more unit of resource e. output received by spending one more dollar on resources
If the U.S. inflation rate increases unexpectedly and government revenues, expenditures, and nominal interest rates remain unchanged:
A. both the U.S. real and nominal budget deficits decreases. B. only the U.S. real budget deficit increases. C. both the U.S real and nominal budget deficits increases. D. only the U.S. real budget deficit decreases.