Which of the following is true about the equation of exchange??
a) The equation of exchange can be presented as: M + V = P + Q.
b) Velocity represents the average number of times that a dollar is used in purchasing final goods or services in a one-year period.
c) ?If M decreases, and V increases, then P must rise and/or Q must rise.
d) All of the above are true about the equation of exchange.
b) Velocity represents the average number of times that a dollar is used in purchasing final goods or services in a one-year period.
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An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps?
a. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion. b. Gather data on crude oil prices and seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations. c. Ask people in Alaska why they are not purchasing oil. d. None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.
Hyperinflation might lead to a severe decline in total output if
What will be an ideal response?
If demand increases, the increase in price will be smaller if demand and supply are highly inelastic.
Answer the following statement true (T) or false (F)
You hold an FDIC insured savings account at your neighborhood bank. Your current balance is $275,000. If the bank fails you will receive:
A. $125,000. B. $250,000. C. $275,000. D. $100,000.