According to the equation of exchange, the
A) quantity of money divided by the inflation rate equals real GDP.
B) quantity of money minus the velocity of circulation equals real GDP minus the price level.
C) quantity of money multiplied by the velocity of circulation equals nominal GDP.
D) velocity of circulation is always smaller than the inflation rate.
E) quantity of money multiplied by the inflation rate equals nominal GDP.
C
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The age-earning cycle shows declining income as a person approaches retirement age because
A) worker productivity is increasing rapidly. B) worker and hours worked diminish. C) companies choose to promote these workers faster. D) companies add-in Social Security payments as a supplement.
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. b. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.