The velocity of money is:
a. money supply divided by prices.
b. spending divided by output.
c. required monetary reserves divided by income.
d. GDP divided by the money supply.
d
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Asymmetric shocks pose a problem for nations linked by fixed exchange rates to a base currency. In general:
A) the home nation always has a better outcome than its foreign trading partner. B) both nations share a common currency and so will experience equal results. C) when the base currency nation takes any action to counteract the shock, it forces its exchange rate partner to do the same to maintain its peg. D) both nations only get half the benefit of any economic policy.
What is the usual response of firm to an increase in the price of what they sell?
a. An increase in output. b. An increase in hiring factors of production. c. An increase in the profit level of the firm. d. An increase in employment at the firm. e. All of the above.