The crude quantity theory of money assumes that
A. V and Q remain constant.
B. V and Q vary.
C. V is constant and Q varies.
D. Q is constant and V varies.
A. V and Q remain constant.
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Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost (TC) and average total cost (ATC). Which of the following equations is equal to a firm's average profit?
A) P - TC B) P - ATC C) (P - ATC) × Q D) (P × Q) - TC
According to the theory of purchasing power parity, whenever a country's price level is expected to fall relative to another country's price level,
A) its currency's real exchange rate relative to the other country's currency should rise. B) its currency should depreciate relative to the other country's currency. C) its currency should appreciate relative to the other country's currency. D) its nominal interest rate should rise relative to the other country's nominal interest rate.