Suppose the money supply increases by 10 percent but velocity is not constant. Given this information, it follows that:
A. nominal GDP will increase by 10 percent.
B. nominal GDP will increase by more than 10 percent.
C. nominal GDP will increase by less than 10 percent.
D. the change in nominal GDP cannot be determined.
Answer: D
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Direct controls imposing identical emission limits on all polluters are
A) efficient if emissions can be accurately monitored, which is seldom possible. B) equitable because all polluters bear equal costs. C) likely to require a great deal of high-cost pollution reduction. D) more efficient and equitable than a system of fines because fines matter less to large than to small polluters.
Which of the following is a correct conclusion regarding the successful implementation of fiscal policy?
a. Successful fiscal policy would be easy to achieve if Congress would stay out of the economy and permit natural market forces to restore full-employment equilibrium. b. Successful fiscal policy is difficult to achieve because in the real world the investment, net exports, and consumption schedules are constantly shifting. c. Successful fiscal policy is much easier to achieve today because econometric models make economic forecasting much easier. d. As the income-expenditure model suggests, fiscal policy planners can move GDP to any level they please by changing tax and spending levels.
If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:
A. progressive tax. B. poll tax. C. proportional tax. D. regressive tax.
Even though price elasticity of demand is always ________, by convention its absolute value is always discussed as a ________
A) negative; prime number B) positive; negative number C) a fraction; whole number D) negative; positive number