When something happens to the economy, monetarists ask two questions:
a. What does this do to government spending, and what does it do to tax revenues?
b. What does this do to real GDP, and what does it do to the price level?
c. What does this do to investment spending, and what does it do to net exports?
d. What does this do to the money supply, and what does it do to velocity?
d
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Suppose the United States eliminates high tariffs on German bicycles. As a result, we would expect:
A. the price of German bicycles to increase in the United States. B. employment to decrease in the German bicycle industry. C. employment to decrease in the U.S. bicycle industry. D. profits to rise in the U.S. bicycle industry.
The increase in the productivity of U.S. farmers has caused:
A. More people to be attracted to farming B. A decrease in the size of the average farm C. A reduction in the number of people in farming D. A reduction in the surpluses produced by farmers