According to the quantity theory of money currently used by monetarists, assuming velocity is constant (at a value of 5), a 10 percent increase in the money supply will raise
a. nominal GDP by 50 percent.
b. real GDP by 10 percent.
c. nominal GDP by 10 percent.
d. real GDP by 50 percent.
c
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When ________ changes, the supply of loanable funds curve shifts
A) the price level B) "animal spirits" C) people's expected future income D) the expected rate of profit E) investment
The above figure shows the market for apples. If a consumer group convinces the government to set a maximum price of $2 per pound, then
A) 300 pounds of apples will be sold at $2. B) no apples will be supplied. C) no apples will be demanded. D) there will be a shortage of 100 pounds of apples.
Mark and John are 10-year-old twins who do not get along. They have opened separate lemonade stands and are competing with each other, selling lemonade on their block. Their mother observes that Mark is very good at making lemonade and John is an
excellent young salesman. She suggests they both could make more money if they worked together. John counters that two stands will always make more money than one. Who is right? Why?
The payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing in new capital or not investing in new capital.
Firm A's dominant strategy is to ________, and Firm B's dominant strategy is to ________.
A. not invest; not invest B. not invest; invest C. invest; invest D. invest; not invest