Suppose at present people hold a quantity of money equal to 80% of nominal GDP. What happens to velocity if people wish to increase their money holdings to 85% of nominal GDP?
A) Velocity can increase or decrease depending on people's tastes and preferences toward money.
B) Velocity is unaffected.
C) Velocity increases.
D) Velocity decreases.
Ans: D) Velocity decreases.
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According to the efficient markets theory of stock prices,
a. fundamental analysis is a way to profit from predicting stock prices b. fundamental and technical analysis are largely useless c. technical analysis is the best approach to profit from predicting stock prices d. fundamental and technical analysis must be synthesized in order to profit from predicting stock prices e. whether fundamental and technical analysis can be profitable depends on the specific firm being analyzed
Losses are important to a competitive price-searcher market (industry) because they send a message to the market participants that
a. more resources should be devoted to a particular industry. b. resources can rise in value if diverted away from that particular industry. c. resources are allocated exactly as they should be. d. the firms should charge lower prices.
The incidence of a tax is
a. always determined by the demand side of the market b. always determined by the supply side of the market. c. always determined by the interaction of the demand and supply side of the market.. d. always determined by which side of the market the government imposes the tax on.
When a company engages in a substantial amount of image advertising, they are trying to cause consumers to see their product as being unique and distinctive relative to the substitute products made by rival firms. The companies are thus trying to use successful image advertising to:
a. reduce the price elasticity of demand for their products. b. increase the price elasticity of demand for their products. c. increase the price elasticity of supply of their goods. d. reduce the price elasticity of supply of their goods.