This graph shows three different budget constraints: A, B, and C.
If Gary has budget constraint A, and the price of milk is $3 a gallon, what is Gary's income?
A. $27
B. $12
C. $9
D. Cannot answer this without knowing the price of soda.
Answer: A
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If the real interest rate is equal to the nominal interest rate in an economy:
A) inflation must be negative in the economy. B) inflation must be zero in the economy. C) inflation must be positive in the economy. D) the nominal interest rate must be zero.
A scatter plot:
A) is the same as a pie chart. B) shows how a variable changes across time. C) shows the relationship between two variables at a point in time. D) represents the frequency of a variable being observed.
Answer the following statements true (T) or false (F)
1) Tacit collusion is more likely to occur in the commercial airline market than the fast food market. 2) Price visibility can work both for and against tacit collusion. 3) When firms have a tacit collusion agreement, if prices are highly visible, this decreases the cost of cheating. 4) The primary function of meet-the-competition clauses is to win customers. 5) Most-favored-customer clauses can help support tacit collusion.
According to the equation of exchange, if real Gross Domestic Product (GDP) is $25 billion, the money supply is $10 billion, and the price index equals 2, then the income velocity of money is
A) 5. B) 10. C) 25. D) 50.