According to the quantity theory of money, which one of the following economic variables would change in response to an increase in the money supply?
a. prices
b. real income
c. velocity
d. employment
a
You might also like to view...
The term allocative efficiency refers to
a. the level of output where MC = AVC b. the equality between MR and MC c. the production of those goods and services most valued by consumers d. the point where marginal revenue equals average total cost e. the production of a good up to the point where AFC = 0
Which of the following shifts the demand for watches to the right?
a. a decrease in the price of watches b. a decrease in consumer incomes if watches are a normal good c. a decrease in the price of watch batteries if watch batteries and watches are complements d. an increase in the price of watches e. none of the above
Suppose that you open your own business and earn an accounting profit of $40,000 per year. When you started your business, you left a job that paid you a $25,000 salary annually. Also, suppose that you invested $70,000 of your own funds to start up your
business. If the normal rate of return on capital is 5 percent, your economic profit is A) $15,000. B) -$11,500. C) $11,500. D) -$55,000.
Exhibit 8-11 A firm's cost and marginal revenue curves
In Exhibit 8-11, when the price is $5, the firm:
A. is making an economic profit of $21. B. should produce output equal to 10. C. is breaking even. D. should produce output equal to 7.