Refer to the above table. If the price of the good produced is $10 and the wage rate is $500, then the marginal revenue product of the 5th worker is

The major difference between the quantity theory of money (QTM) and the equation of exchange (EOE) is:

a. QTM deals with different macroeconomic variables than EOE. b. EOE is a tautology and QTM is a theory. c. EOE is a theory, and QTM is a tautology. d. There is no difference between QTM and EOE. They are both basically looking at the same variables in the same way. One approach is monetarist and the other is Keynesian. e. EOE is a stock concept, and QTM is a flow concept.

Table 29-1Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars) Banks ? Federal Reserve System ? Assets Liab. Assets Liab. Reserves +$10 ? U.S. Gov’t Bank Reserves U.S. Gov’t ? Sec. +$10 +$10 Securities?$10 ? ? ? ? After the transaction in Table 29-1 is completed, what happens to actual reserves, required reserves, and excess reserves? Assume the required reserve ratio is 25 percent.

A. Actual reserves increase by $10 million, required reserves increase $2.5 million, and excess reserves increase by $7.5 million. B. Actual reserves decrease by $10 million, required reserves decrease $2.5 million, and excess reserves decrease by $7.5 million. C. Actual reserves increase by $10 million, required reserves are unchanged, and excess reserves increase by $10 million. D. Actual reserves decrease by $10 million, required reserves decrease by $10 million, and excess reserves are unchanged.