Monetarists use the equation of exchange to predict the effects of changes in M on
a. velocity.
b. nominal GDP.
c. real GDP.
d. the price level.
b
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According to the short-run aggregate supply curve, firms are most likely to respond to an increase in aggregate demand by raising ________.
A. prices B. production C. both production and prices D. neither production nor prices
Suppose that Dave has $200 to spend per week and he buys only magazines and pizza. The price of a pizza is $10 and the price of a magazine is $5. What is Dave's real income in terms of magazines?
A) 20 B) 40 C) 200 D) 10
The price elasticity of demand measure is generally stated as an absolute value.
Answer the following statement true (T) or false (F)
What is the shape of the average total cost curve for a firm in the short run?
a. U-shaped. b. A horizontal line. c. A vertical line. d. A curve that slopes upward to the right.