In the money market, an excess demand for money is equivalent to an excess demand for bonds
Indicate whether the statement is true or false
FALSE
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Present and explain the Fundamental Equation of the Monetary Approach
What will be an ideal response?
Joe's income is $500, the price of food (F) is $2 per unit, and the price of shelter (S) is $100. Which of the following represents his marginal rate of transformation of food for shelter?
A) -5 B) -50 C) -.02 D) None of the above
If the economy's real GDP is growing at 3 percent each year and velocity is constant, for the price level to increase:
a. the money supply would have to grow at more than 3 percent per year. b. the money supply would have to grow at exactly 3 percent per year. c. the money supply would have to grow at less than 3 percent per year. d. the money supply would have to remain stable.
Consider the following game. You roll a six-sided die and each time you roll a 1, you get $50. For all other outcomes you pay $10. Since the expected value of this game is $0, the game is called a(n)
A. even game. B. zero sum game. C. fair bet. D. gamble.