In an economy that is at full employment, an increase in money supply will result in inflation, unless
A) velocity increases.
B) velocity decreases.
C) real GDP falls.
D) tax reduction is proportional to increases in the money supply.
B
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According to Baumol and Blinder, from the demand side a decrease in the price level causes aggregate expenditures to
a. fall, resulting in a lower level of equilibrium income. b. fall, resulting in a higher level of equilibrium income. c. rise, resulting in a higher level of equilibrium income. d. rise, resulting in a lower level of equilibrium income.
Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in the class.StudentReservation Price($/Book)Q60R54S48T42U36V30W30X30 If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then what will be the bookstore's total economic profit?
A. $158 B. $150 C. $154 D. $130