Using the quantity equation, if the velocity of money grows at 5 percent, the money supply grows at 10 percent, and real GDP grows at 4 percent, then the inflation rate will be
A) 19 percent.
B) 15 percent.
C) 11 percent.
D) 6 percent.
Answer: C
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Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?
A) consistently pursuing policy to promote the credibility of the central bank B) explicitly and credibly targeting inflation C) using expansionary monetary policy to drive down interest rates D) increasing the target interest rate on overnight loans
If a firm decreases its plant size and finds that its long-run average costs have decreased, then
A) the firm should reduce its plant size even more. B) its labor is more productive in a smaller plant. C) its diseconomies of scale are less. D) the firm is now profitable.
Refer to the following graph. The price of labor is $3 per unit:
Refer to the following graph. The price of labor is $3 per unit:
A. 17 units of capital B. 20 units of capital C. 19 units of capital D. 18 units of capital
The goods and services purchased from foreign sources are:
A.) Investment. B.) Exports. C.) Imports. D.) Income transfers.