The quantity theory of money is a proposition about
A) the nominal interest rate and the quantity of money demanded.
B) the Fed's methods used to change the quantity of money.
C) nominal and real interest rates.
D) the relationship between financial assets and currency demanded.
E) the relationship between a change in the quantity of money and the price level.
E
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The worst drought in over 50 years has decimated crops of soy beans and corn in the United States. (Source: New York Times, August 10, 2012). Because the production of corn has decreased, prices are expected to increase by 25 percent
These data are insufficient for calculating the elasticity of demand because we also need to know the A) percentage increase in income. B) percentage increase in quantity. C) percentage decrease in quantity. D) increase in bushels per acre.
Figure 9-12 shows three possible long-run supply curves for an industry that is currently in equilibrium with price (P*) and quantity (Q*). Which of the following statements is correct?
a.
The long-run supply curve would be F for a decreasing-cost industry, H for an increasing-cost industry, and G for a constant-cost industry.
b.
All three long-run supply curves indicate that the firms' LRATC curves shift as industry output expands.
c.
If the industry uses a significant portion of a scarce input, the long-run supply curve would likely be curve H.
d.
An industry that moves along long-run supply curve F earns above-normal profits in the long run.
e.
If an increase in market output leads to lower prices for a key input, the long-run supply curve would likely be curve H.