According to the quantity theory of money, a 25 percent change in M, the quantity of money, leads to a 25 percent change in
A) V, the velocity of circulation.
B) P, the price level.
C) Y, real GDP.
D) R, the interest rate.
B
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
Which of the following causes a movement along the aggregate demand curve?
A) an increase in the price level B) an increase in government spending C) an increase in the money supply D) a fall in wages
What is a voluntary export restraint (VER)?
What will be an ideal response?
Which of the following firms is likely to have the highest market power?
A) A perfectly competitive firm B) A monopolistic competitor C) A monopoly D) An oligopoly with homogeneous products