Answer the following statements true (T) or false (F)
1) Monetarists say the velocity of money is highly variable and there is no close link between the
money supply and the level of economic activity.
2) According to monetarists, discretionary monetary policy has been a major source of economic
instability.
3) The equation of exchange is MV = PQ.
4) Mainstream macroeconomists see two main sources of macroeconomic instability: changes in
investment spending and, occasionally, adverse aggregate supply shocks.
1) F
2) T
3) T
4) T
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Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the deadweight loss is equal to economic surplus. B) producer surplus equals consumer surplus. C) marginal benefit is less than marginal cost. D) the marginal benefit of each of the 10,000 units of iced tea equals $3.
In the United States in the 1920s, there were many bank failures in ___ areas, as the result of ___
a. rural, high levels of indebtedness taken on in WWI b. rural, pro-urban Federal spending policies c. urban, lack of demand from the lower middle class for industrial products d. urban, pro-rural Federal spending policies