In order to consider the equation of exchange an economic model, what must we assume?
a. Real GDP is a constant value.
b. Changes in GDP cause changes in the money supply.
c. The money supply is constant.
d. Changes in velocity are small and predictable.
d
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Suppose that one-year treasury bills yield 8 percent in the United States and 6 percent in Japan. Investors will prefer to purchase the U.S. securities, unless they expect the dollar to __________ against the yen over the next year
A) depreciate by less than 2 percent B) depreciate by more than 2 percent C) appreciate by less than 2 percent D) appreciate by more than 2 percent
If the government removes a binding price ceiling from a market, then the price received by sellers will
a. decrease, and the quantity sold in the market will decrease. b. decrease, and the quantity sold in the market will increase. c. increase, and the quantity sold in the market will decrease. d. increase, and the quantity sold in the market will increase.