The table below shows data for Indonesia between 2005 and 2006
2005 2006
Money growth rate 21.4 12.0
Real GDP growth rate 5.7 5.5
Assume the rate of velocity change is constant. According to the quantity theory of money, Indonesia's inflation rate
A) is higher in 2005 than in 2006.
B) was 17.5 percent in 2006.
C) is 27.1 percent in 2005.
D) will increase over the 12 months.
A
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A local bar provides free pretzels and peanuts. Once a week it even provides chicken wings for only ten cents each. It is
A) selling drinks below cost. B) selling pretzels, peanuts and wings below cost. C) unfairly competing against other local bars who are unable to do the same. D) almost certainly doing none of the above.
In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is
A) an increase in the expected return on bonds relative to other assets. B) a decrease in the expected return on bonds relative to other assets. C) an increase in wealth. D) a reduction in the riskiness of bonds relative to other assets.