According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:

Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new business were $50,000 . and explicit costs were $10,000 . Calculate Ernie's economic profit

a. $10,000 b. $50,000 c. $20,000 d. $40,000 e. $9,500

Suppose the government increases unemployment benefits, which are paid for with higher taxes on earnings. If the marginal propensity to consume is the same for both the beneficiaries of the unemployment benefits and the workers paying taxes, _____. a. GDP will first increase and then fall. b. There will be no change in real GDP. c. Real GDP will increase substantially. d. Real GDP will fall

substantially. e. GDP will first fall and then increase.