The quantity theory of money is based on the formula that
A) V = P*Y*Ms.
B) Y = P*V/Ms.
C) Ms= P*V/Y.
D) P = Ms*V/Y.
D
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To prevent obesity, the government may establish a tax on high caloric foods, such as twinkies. A twinkie tax will have the smallest impact on quantity demanded when the demand curve for twinkies is
A) perfectly elastic. B) perfectly inelastic. C) more elastic than the supply curve. D) both A and B.
In the income-expenditure framework, if planned aggregate expenditures are greater than real gross domestic product (GDP), _____
a. the price level will fall b. consumption will fall c. inventories will increase d. inventories will decrease e. consumption will decrease
At an output of 12, ATC is $12 and price is $9. At an output of 13, ATC is $12.40 and price is $9. MC = MR at an output of 12.6. At that output the firm will
A. take a loss. B. break-even. C. make a profit.
According to Okun's law, if output grew 1% and full-employment output rose 3%, what would be the change in the unemployment rate?
A. 2 percentage points B. -2 percentage points C. 1 percentage point D. -1 percentage point