If the velocity of money is increasing, but the money supply is not, it is likely the economy is experiencing:
A. inflation.
B. growth.
C. deflation.
D. a trade deficit.
Answer: A
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A highly liquid asset
A) generally has a very limited market for its resale. B) has high transaction costs associated with its sale. C) must be held for a substantial period of time. D) can be disposed of easily without loss of value.
The price elasticity of demand for meat in general is inelastic while the price elasticity of demand for turkey or chicken is more elastic. Why?
A) Turkey and chicken are not red meat. Because they are not the same as other meats, they should have different elasticities. B) Turkey and chicken have many substitutes, such as fish or beef, while meat in general has fewer substitutes. C) Turkey and chicken are inferior goods. D) Turkey and chicken are normal goods.
Laissez-faire refers to a situation in which there is ____ with the workings of the market system.
A. zero consumer involvement B. zero government interference C. minimal government interference D. complete government interference
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.