Given the quantity theory of money demand, a doubling of the money supply will lead to a
A) halving of the velocity of money.
B) doubling of the level of real output.
C) doubling of the level of nominal output.
D) rise in the level of interest rates.
C
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Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling
Indicate whether the statement is true or false
When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1euro), U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because ________
A) private consumption in the foreign country increases by $150 B) if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm C) if the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased D) all of the above E) none of the above