Let M = money supply; P = price level; V = velocity; Y = real GDP. The equation of exchange is given by
A) M x V=nominalGDP.
B) M x Y=P x V.
C) M x P=V x Y.
D) M x V=(1/V)P x Y.
Ans: A) M x V=nominalGDP.
Economics
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The rationing function of prices refers to
A) the situation when government must intervene in a market when there is a large shortage or surplus. B) the synchronization of decisions by buyers and sellers that leads to an equilibrium. C) the synchronization of decisions by buyers and sellers through the direction of government agencies. D) the situation when only the rich get the goods they want.
Economics
Borrowing is like:
A. buying the right to use your money for a time. B. buying the right to use someone else's money. C. selling the right to use your money for a time. D. selling the right to use someone else's money.
Economics