In the above figure, if we start at AD1 and SRAS1, and the money supply increases unexpectedly, what would be the long-run equilibrium?
A. P1
B. E2
C. E3
D. E1
Answer: C
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If the velocity of money and real GDP are fixed, then the quantity theory of money implies that the price level will:
What will be an ideal response?
The individual supply curve for labor is the relationship between the wage and the quantity of labor that:
A. all workers are willing to provide. B. any given worker is willing to provide. C. all firms are willing to employ. D. any given firm is willing to employ.
What is the central role of financial intermediaries in a market economy?
A) the creation and printing of money B) keeping the price level stable C) bringing together savers and borrowers D) providing safe deposit boxes for people and businesses
Refer to Common Property II. If access cannot be prohibited, then users of the common property receive a surplus of
The following questions refer to the accompanying diagram, which shows the benefits and costs associated with the use of a common property.
a. zero.
b. area I.
c. area F + G + H + I.
d. area A + C + F + I.