Professor Tabarrok uses which rewritten version of the quantity theory of money to explain the aggregate demand curve?
A. The growth rate of M + the growth rate of V = inflation + real growth
B. The growth rate of M + real growth = the growth rate of V + inflation
C. The growth rate of M + the growth rate of V + inflation + real growth = 100%
D. The growth rate of M ? inflation = real growth - the growth rate of V
Ans: D. The growth rate of M ? inflation = real growth - the growth rate of V
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Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts less than the demand curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
When prices rise, the purchasing power of money
A) rises. B) falls. C) is unaffected. D) may rise, fall, or be unaffected depending upon circumstances.