The classical theory of inflation illustrates the relationship among:
A. savings, investment, and the interest rate.
B. money supply, savings, and investment.
C. money supply, output, and the overall level of prices.
D. spending, saving, and the overall price level.
Answer: C
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Price increases always reduce economic efficiency.
Answer the following statement true (T) or false (F)
A stock option is said to be "out of the money" if:
A) the strike price equals the exercise price. B) stock price equals the strike price. C) strike price exceeds the stock price. D) stock price exceeds the strike price.
The concept of price elasticity of demand measures the
A. number of buyers in a market. B. slope of the demand curve. C. extent to which the demand curve shifts as the result of a price decline. D. sensitivity of consumer purchases to price changes.
Who sells what to whom
A) has been a major preoccupation of international economics. B) is not a valid concern of international economics. C) is not considered important for government foreign trade policy since such decisions are made in the private competitive market. D) is determined by political rather than economic factors. E) is less important than international economic theory.