The quantity theory of money implies that over the long run, the inflation rate will ________
A) equal the nominal interest rate
B) equal the growth rate of M2 minus the growth rate of real output
C) equal the growth rate of M2 plus the growth rate of real output
D) equal the velocity of money
B
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Fluctuating exchange rates can alter a multinational firm's profits and losses. The U.S. automobile manufacturer Tesla produces vehicles in the United States and sells them in Norway
(Norway is Tesla's largest overseas market.) If the dollar appreciates against the Norwegian krone, then Tesla's revenues from these operations should ________ and its profits from these operations should ________. A) fall; rise B) rise; fall C) rise; rise D) fall; fall
If the price elasticity of demand for a product is equal to 4, a 1 percent increase in price of the product will cause the quantity demanded to _____ by _____ percent
a. increase; 0.25 b. decrease; 0.25 c. increase; 4 d. decrease; 25 e. decrease; 4