Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7. Which of the following statements is true?
A) Julie has converted the consumer surplus (from a uniform price) into economic profit.
B) Julie's has converted the producer surplus (from a uniform price) into consumer surplus.
C) Julie is worse off because the demand for her services is reduced.
D) Julie's customers are better off because their consumer surplus has increased.
A
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The equation of exchange
A) is MV = PY. B) becomes the quantity theory if velocity and the price level are constant. C) cannot be used in an economy with inflation. D) All of the above answers are correct.
Real-world accuracy of the money multiplier can be affected by:
a. the amount of loans provided by nonbanks. b. the way the public divides its holding of M1 between currency and certificates of deposit. c. the willingness of banks to loan excess reserves. d. all of these.