If financial news broadcasts reported that inflation was likely to rise significantly next year, what would most likely happen to the velocity of circulation?
A. Velocity will decrease.
B. Velocity will increase.
C. Velocity will remain constant.
D. Velocity is unrelated to inflation.
Answer: B
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What was the source of the problems encountered by many financial firms during the late 2000s?
What will be an ideal response?
Brandon is having difficulty deciding between two jobs, X and Y. As shown in the accompanying diagram, X entails a greater risk of injury than Y, but pays more. Ideally, Brandon would like a job that both pays well and does not entail a high risk of injury. 
If Brandon behaves like most decision-makers, then the addition of option Z would:
A. have no impact on his choice of X and Y. B. increase his likelihood of picking X. C. decrease his likelihood of accepting any job. D. increase his likelihood of picking Y.
A wealthy executive is holding money, waiting for a good time to invest in the stock market. This action would be an example of the:
A. Transactions demand for money B. Asset demand for money C. Creation of fiat money D. Use of money as a medium of exchange
Large countries can improve their welfare by levying a tariff only if it does not
A) encourage rent seeking elsewhere in the economy. B) discourage innovation. C) lead to retaliation by the nation's trading partners. D) All of the above. E) None of the above.