Consider an economy where the growth rate of real GDP is 6% and the annual rate of inflation is 2%. If the quantity theory of money holds, the growth rate of money supply in the economy will be:

The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs. After this price ceiling is in effect, producer surplus equals ________

A) $900,000 B) $400,000 C) $200,000 D) $100,000 E) $1,800,000

The example of an inflationary gap in 2006-2007 suggested that the economy adjusts

a. rapidly to inflationary gaps by lowering prices. b. rapidly to inflationary gaps by raising prices. c. slowly to inflationary gaps by lowering prices. d. slowly to inflationary gaps by increasing inflation.