If the velocity of money is constant, then a 2% increase in the money supply
A) must be the result of a 2% increase in the price level.
B) would change nominal GDP by a smaller percentage.
C) would change nominal GDP by an equal percentage.
D) would change nominal GDP by a larger percentage.
Answer: C) would change nominal GDP by an equal percentage.
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A breakthrough in technology is most likely to: a. reduce the labor needed to produce a given amount of output. b. decrease the demand for all goods and services in a country. c. increase the cost of production for a firm
d. reduce the availability of skilled workers. e. lower the standard of living in a country in the long run.
When a government influences the exchange rate of its currency, it is said to be practicing "dirty floating."
a. True b. False Indicate whether the statement is true or false
A country's effective factor endowment is defined as its:
a. actual factor endowment times factor productivity. b. actual factor endowment times GDP. c. effective factor endowment times factor productivity. d. actual factor endowment divided by its factor productivity.
Suppose we wish to examine the determinants of the equilibrium real wage and equilibrium level of employment (N). In a graph with the real wage on the vertical axis, and the level of employment on the horizontal axis, the price-setting relation will now be
A) a vertical line. B) a horizontal line. C) an upward sloping line. D) a downward sloping line. E) kinked at the natural rate of unemployment.