What do most economists think is the most accurate statement about velocity?
A. Velocity is fairly constant in the short run but varies considerably in the long run, complicating predictions about nominal GDP.
B. M1 velocity is more stable in the short run than M2 velocity, and it has been a superior tool in predicting changes in nominal GDP.
C. Velocity is not constant in the short run, and predictions about nominal GDP have not fared well.
D. M2 velocity has been less stable than M1 velocity, but both are reliable enough to make accurate predictions about changes in nominal GDP.
Answer: C
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People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as
A) discouraged workers. B) wage-rate busters. C) unemployed. D) non-participants.
Consider a closed economy without the government. If the savings rate in the economy is 15% and the aggregate savings is $6,000, the GDP of the economy is:
A) $15,000. B) $27,000. C) $40,000. D) $30,000.
Suppose that the quantity of staplers demanded falls from 10,000 per week to 8500 . Use the midpoint formula to calculate the percentage change in quantity demanded
What will be an ideal response?
If significant economies of scale continue as output increases,
a. then small firms enjoy a cost advantage over large firms b. minimum efficient scale is small relative to market demand c. we have the case of a natural monopoly d. the market will disappear in the long run. e. all firms will become large.