Under the gold standard system, 1 ounce of gold was worth $23 in the United States and worth 15.5 pounds in Great Britain. If the price of gold in Great Britain decreases by 10%, then:
A) the new exchange rate would show approximately 10% depreciation of the dollar.
B) $1 = 1.64 pounds.
C) 1 pound = $1.64.
D) the new exchange rate would show approximately 10% depreciation of the dollar, and 1 pound would be equal to $1.64.
Ans: D) the new exchange rate would show approximately 10% depreciation of the dollar, and 1 pound would be equal to $1.64.
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Say the required reserve ratio is 10 percent. If you pay back a loan of $20,000 a bank had previously made to you, the act of paying back the loan: a. adds $2,000 in bank reserves
b. adds $20,000 in bank reserves. c. eliminates $2,000 in bank reserves. d. eliminates $20,000 in bank reserves.
Monetarists believe
A) Real GDP is not determined by M in the long run. B) velocity is constant. C) the SRAS curve is vertical. D) a and c E) a, b and c
The income effect and the substitution effect offset each other at point
A. I.
B. J.
C. K.
D. S.