Which one of the following will cause velocity to increase?
A. Decreasing the interest rates
B. Increasing the efficiency of the payments system
C. Switching from weekly to monthly payroll checks
D. Increasing the money supply
Answer: B
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A price taker is a firm that
A) seeks to maximize revenue rather than profit. B) cannot influence the market price. C) searches for the best price and then takes the highest profits possible. D) buys inputs for firms.
Exhibit 4-3 Supply and demand curves
Initially the market shown in Exhibit 4-3 is in equilibrium at P2, Q2 (E2). Changes in market conditions result in a new equilibrium at P2, Q4 (E4). This change is stated as a(n):
A. increase in supply and an increase in demand. B. increase in supply and a decrease in demand. C. decrease in demand and a decrease in supply. D. increase in demand with supply held constant at S2.