Two countries, Alpha and Beta, have the same levels of nominal and real GDP. Each dollar in Alpha is used more frequently than each dollar in Beta. Therefore, it must be the case that ________ in Alpha than in Beta.
A. the rate of inflation is greater
B. the velocity is lower
C. the money stock is smaller
D. the price level is greater
Answer: C
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In the federal funds market diagram, a decrease in the required reserve ratio
A) shifts the demand curve for reserves to the left. B) increases the federal funds rate. C) results in a multiple expansion of deposits, which increases the equilibrium level of reserves held by banks. D) shifts the supply curve for reserves to the right.
The prisoner's dilemma is a game of strategy:
A. in which people make rational choices that lead to the ideal result for all. B. that leads everyone to be as well off as possible without making another worse off. C. in which people make rational choices that lead to a less-than-ideal result for all. D. that leads people to make irrational choices that lead to the ideal result for all.
According to the majoritarian vision of democracy, what role should citizens who hold minority preferences play in determining policy?
A. They should serve as a check on the power of the majority. B. Their opinions should be a part of a consensus that determines policy. C. Citizens with minority preferences should have no role in the policymaking process. D. They should be as fully involved in the process as those who hold majority preferences.
When marginal cost pricing occurs
A. the firm is at the shutdown point. B. the firm can only break even if it does not set price to marginal cost. C. price equals the additional cost society incurs in producing the next unit of an item. D. price equals average variable cost but exceeds average total cost.