Suppose that real GDP grows by 3 percent a year, the quantity of money grows 5 percent a year, and velocity does not change. In the long run, the inflation rate equals
A) 3 percent. B) 5 percent. C) 8 percent. D) 10 percent. E) 2 percent.
E
You might also like to view...
A perfectly competitive firm faces a market clearing price of $150 per unit. Average total costs are at the minimum value of $120 per unit at an output rate of 70 units. Marginal cost equals $150 per unit at an output rate of 75 units
It can be concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns negative economic profits per unit sold. C) 75 units, at which the firm earns positive economic profits per unit sold. D) 70 units, because price is less than average total costs.
If the marginal revenue product of the fifth worker is $15, the price of the last unit of output produced is $5, and the firm sells as a price searcher, then the marginal product of the fifth worker is
a. 3 units of output b. 45 units of output c. fewer than 3 units of output d. greater than 3 units of output e. greater than 75 units of output
Public goods are not free. If we need a fighter aircraft, we are obliged to give up something else that could have been provided with the resources used to make the aircraft. The opportunity cost of providing aircraft can be represented in the
a. paradox of thrift b. aggregate expenditure curve c. marginal propensity to consume d. innovation cycle e. production possibilities curve
Which of the following is a tool of monetary policy?
A. Buying and selling government bonds B. Making loans to banks C. Setting reserve requirements D. All of the above are tools of monetary policy.