Using the cash balance version of the quantity theory with k = .2, an increase in the money supply of $100 billion leads to an increase in GDP of
A) $500 billion.
B) $100 billion.
C) $50 billion.
D) $20 billion.
A
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If a price floor is set below the current market clearing price, then
A) a surplus must immediately occur. B) a shortage must immediately occur. C) there will be incentives for black markets to develop. D) quantity demanded will remain equal to quantity supplied at the current market clearing price.
The capital account is
A) the reserve assets created by the International Monetary Fund for countries to use in settling international payment obligations. B) the price of one nation's currency in term of the currency of another country. C) a category of the balance of payments transactions that measures flows of real and financial assets. D) a category of the balance of payments transactions that measures the exchange of merchandise, the exchange of services, and unilateral transfers.