The money supply in Muckland is $100 billion. Nominal GDP is $800 billion and real GDP is $200 billion. What are the price level and velocity in Muckland?
a. The price level and velocity are both 8.
b. The price level is 2 and velocity is 8.
c. The price level and velocity are both 4.
d. The price level is 4 and velocity is 8.
d
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When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect
Indicate whether the statement is true or false
What is one reason why stocks are not considered money?
a. They cannot be readily exchanged for legal tender. b. Their value fluctuates, and there is no guarantee of being able to obtain their original value. c. They have exceptionally high liquidity, so determining their value is difficult. d. Brokers pool them with the money of other depositors.
The government imposes a tax on an industry that produces goods creating a negative externality. Yet the industry produces more than the optimum quantity of output. This means
A) the tax is more than the external cost associated with the product. B) the tax is less than the external cost associated with the product. C) the company should advertise the product more. D) the company should increase the production of the product.
In the above figure, if d3 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A. A B. B C. C D. D