Biology Forums - Study Force

Causality is clear and mechanical with the quantity theory of money. If M increases because:
 a. V and Q are variable, the price level, P, increases.
  b. V and Q are variable, the price level, P, decreases.
  c. V and Q are constant, the price level, P, increases.
  d. V and Q are constant, the price level, P, decreases.
  e. P and Q are constant, velocity, V, increases.

QUESTION 2

The type of unemployment that occurs because of a recession is called:
 a. frictional unemployment.
  b. seasonal unemployment.
  c. natural unemployment.
  d. cyclical unemployment.

QUESTION 3

The marginal propensity to consume (MPC) is computed as the change in:
 a. consumption divided by the change in savings.
  b. consumption divided by the change in income.
  c. consumption divided by the change in GDP.
  d. None of these.

QUESTION 4

According to the quantity theory of money:
 a. the velocity of money is highly variable.
  b. the money supply directly affects real GDP.
  c. the money supply inversely affects velocity.
  d. real GDP increases as the price level increases.
  e. P = MV/Q.

QUESTION 5

Which type of unemployment is experienced by a person who is laid off at an office because word processing equipment and software reduce the need for typists?
 a. Seasonal.
  b. Cyclical.
  c. Voluntary.
  d. Structural.
  e. Frictional.

QUESTION 6

The fraction of each added dollar of income that is used for consumption is called the:
 a. average propensity to consumer (APC).
  b. autonomous consumption rate (ACR).
  c. marginal consumption propensity (MCP).
  d. marginal propensity to consume (MPC).

QUESTION 7

Since classical economists believe that both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes a theory in which:
 a. the quantity of money explains prices.
  b. the quantity of money explains velocity.
  c. the quantity of money explains real GDP.
  d. changes in M cause changes in V.
  e. prices are never flexible

QUESTION 8

Which type of unemployment is most closely connected with the saying you can't teach an old dog new tricks?
 a. Cyclical.
  b. Frictional.
  c. Structural.
  d. Voluntary.
  e. Seasonal.

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