An increase in the money supply and a decrease in real GDP at the same time is consistent with the equation of exchange if:
a. velocity rises rapidly enough
b. velocity falls rapidly enough.
c. the nominal GDP rises rapidly enough.
d. the price level falls rapidly enough.
b
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Suppose the price of tomatoes dramatically increases. Which of the following could cause this change?
A. A news report stating that a pesticide used on tomatoes might cause cancer, shifting the demand to the right B. Hurricanes during the late summer damage the Florida crop, shifting supply left C. Advertising for ketchup increases demand for ketchup, shifting the demand curve to the left D. A reduction in tariffs of tomatoes from Central American, shifting supply right
Increasing cost industries are consistent with ________ in the long run.
A. the law of supply B. the law of diminishing marginal product C. the law of demand D. None of these are correct.
The price elasticity of demand can be computed as
A) change in total utility/change in quantity. B) change in price/change in quantity demanded. C) percentage change in quantity demanded/percentage change in price. D) change in quantity demanded/change in price.
Under which of the following assumptions would the nominal interest rate be equal to the real interest rate?
A) Expected inflation is equal to the nominal interest rate. B) Expected inflation is equal to the real interest rate. C) Expected inflation is negative. D) Expected inflation is equal to zero. E) none of the above