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In the equation of exchange, GDP divided by the money supply is equal to
a. M.
b. V.
c. P.
d. Q.
Suppose there are only two countries in the world, Mexico and the United States. In the
foreign exchange market, it follows that the
a. demand for pesos is linked to the demand for dollars.
b. demand for pesos is linked to the supply of pesos.
c. supply of pesos is linked to the demand for dollars
d. supply of pesos is linked to the supply of dollars.
e. none of the above
Suppose consumption increases at each price level. As a result, aggregate demand
__________, and the AD curve shifts __________.
a. increases; leftward
b. decreases; leftward
c. increases; rightward
d. decreases; rightward
New growth theory puts emphasis on
a. ideas.
b. experimenting with new ways of doing things.
c. rearranging resources in ways that are more valuable.
d. b and c
e. a, b, and c
Suppose we are at a long-run equilibrium point in an AD-AS model. Then the money
supply falls. In the short run, is there any difference between what happens in the
simple quantity theory of money (SQTM) version and the monetarist version of the
model?
a. There is no difference.
b. In the SQTM version, the price level falls; in the monetarist version, it does not.
c. In the monetarist version, Real GDP falls; in the SQTM version, it does not.
d. In the monetarist version, the price level falls; in the SQTM version, it does not.
e. In the SQTM version, Real GDP falls; in the monetarist version, it does not.
Exhibit 3-3
Good Y
A movement from point W to point Z would have been the result of
a. a reduction in the price of good Y.
b. an increase in the number of buyers in the area where good Y is being sold.
c. a decrease in business taxes paid by the producers of good Y.
d. a decrease in the number of buyers in the area where good Y is being sold.
e. an increase in the price of good Y.
Which of the following will not lead to a leftward shift in the SRAS curve?
a. an increase in wage rates
b. an increase in the prices of nonlabor inputs
c. an increase in productivity
d. an adverse supply shock
Paper money is printed at the _______________________, but it is issued to
commercial banks by the ______________________________.
a. Bureau of Engraving and Printing; FOMC
b. U.S. Mint; 12 Federal Reserve District Banks
c. Federal Reserve building in Washington; D.C., U.S. Treasury
d. Bureau of Engraving and Printing; 12 Federal Reserve District Banks
e. none of the above
The base year is always the year in which prices were the lowest.
a. True
b. False
Examples of physical capital include _______________________.Examples of human
capital include ______________________________.
a. knowledge one picks up through education and training; factories and computers
b. machines and factories; chairs and desks
c. knowledge one picks up through education and experience; factories and machines
d. machines and factories; knowledge one picks up through education and training
New growth theory holds technology to be __________; neoclassical growth theory
holds technology to be __________.
a. exogenous; endogenous
b. endogenous; endogenous
c. endogenous; exogenous
d. exogenous; exogenous
Which of the following events prompted the birth of market monetarism?
a. the Great Depression
b. the Great Recession
c. the 1907 Bankers€ Panic
d. the establishment of the European Union
Between 1980 and 2000, income per person in India
a. doubled.
b. tripled.
c. quadrupled.
d. decreased by 25 percent.
