If an economy produces 3,000 units of output with a price level of $2 and with a velocity of money of 12, we know that the money supply must be: A. $1,000. B. $500. C. $2,000. D. $4,000.
A. $1,000.
B. $500.
C. $2,000.
D. $4,000.
B. $500.
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One method for a deficit country to correct the situation under a fixed exchange rate system is to
a. increase aggregate demand with stimulative monetary policy. b. increase aggregate supply with tax cuts. c. decrease aggregate demand with restrictive fiscal and monetary policy. d. decrease aggregate supply with restrictive fiscal policy.
If the consumption of a good by one individual does not change the amount of the good available to others, the good is considered to be
a. durable. b. nonrival-in-consumption. c. a common good. d. a natural resource.
If the income effect outweighs the price effect of a wage increase, the quantity of labor supplied will:
A. remain constant. B. increase. C. drop to zero. D. decrease.
It makes sense for Wendy's to advertise its new menu that allows customers to choose fruit or salad as a substitute for French fries in its values meals, as long as doing so raises:
A. revenue by less than the cost of advertising. B. costs. C. revenue by more than it raises the cost of advertising. D. any revenue at all.