Use the equation of exchange to explain the impact of an increase in the money supply if velocity and output are stable.
What will be an ideal response?
The equation of exchange states that the money supply times velocity (the rate at which money changes hands) equals the level of aggregate spending or price level times real output (MV=PQ). Monetarists believe that velocity and the quantity of real output are stable, which means that an increase in the money supply results in an increase in prices.
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Listed in the above table are the total revenues for the firms in two different industries. Each industry has only eleven firms. Find the four-firm concentration ratio and the Herfindahl-Hirschman Index for each industry
What will be an ideal response?
Which of the following is a consequence of deposit insurance?
A) It may induce the officers of a bank to take more risks. B) It encourages banks to make loans only to the most credit-worthy customers. C) It minimizes the risk of defaulting on loans made to the bank's customers. D) It encourages depositors to closely scrutinize a bank's lending activities.