All of the following items, except one, are part of the equation of exchange. Which is the exception? Multiple Choice a)Real output. b) The interest rate. c)The money supply. d)The velocity of money. e)The price level
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- What is the Equation of Exchange presented in the form of an Identity? ________________________________________________________________ where: M represents Money Supply; V represents Velocity; ≡ means must be equivalent to; P represents Price; and Q represents Real GDP.Economists have documented Pacific island economies in which large rocks and boulders were used as money. While this may work for a group of people who only transact with others on the island, the rocks would not be a useful form of money in the world economy because: A. Large rocks are not easily standardized B. Large rocks are not easily divisible C. Large rocks are not easy to carry D. All of the above are trueWhy did british soldiers in German prisoner of war camps in WW1 smoke the best cigarettes and use the low-quality ones as money ?Group of answer choices A. because Gresham's Laws holds B. because the velocity of money is constant C. because the equations of exchange holds
- According to the equation of exchange, if the money supply is $700 million, real GDP is $1,600 million, and nominal GDP is $3,220 million, then the velocity of money is equal to:State three ways in which a government can influence the value of its currency. For each, state whether the activity affects the supply-side or demand-side of the market, and name a disadvantage of the strategy.If speculators bid up the value of the U.S. dollar in the market for foreign exchange, then Answer U.S. goods become more expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts right. U.S. goods become more expensive relative to foreign goods so aggregate demand shifts left. U.S. goods become less expensive relative to foreign goods so aggregate demand shifts left.
- The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economyThe equation of exchange suggests that doubling of price price level is caused by doubling of... - the money supply - production - the velocity of money - all of the above factors work jointlyThis is not a writing assignment, this is a multiple-choice question Which of the below is NOT a factor determining the demand for a currency such as the U.S. dollar? Group of answer choices All else equal, foreign capital is attracted by emerging economies with unstable political history and greater volatility in their financial and stocks markets. All else equal, higher real interest rates offered in the U.S. will make it lucrative for foreign investors to purchase U.S. bonds that pay a higher interest rate. Foreigners will need to purchase U.S. dollars to purchase U.S. treasuries. A country with a booming economy will often have a currency that is appreciating. Strong growth presents economic investment opportunities and attracts financial capital from other countries. If the country in question is the U.S. then the inflow of foreign financial capital must be converted to U.S. dollars to be invested in the U.S.
- In the circular-flow diagram, the goods markets are where:(a)The households purchase goods from firms;(b)Firms purchase goods from government;(c)Firms purchase goods from households;(d)The government purchases goods from households.Q.1.3Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a: (a)unit of account.(b)store of value.(c)medium of exchange.(d)standard of deferred payment.Economics Q8 Suppose, on a certain day in February, a speculator observes the following prices in the foreign exchange and currency futures markets: GBP/USD spot: 1.6465 March futures: 1.6425 September futures: 1.6250 December futures: 1.6130 The speculator thinks that the markets are overestimating the weakness of sterling (GBP) against the dollar. How can she act on this view to make a profit? Under what circumstances do her actions lead to a loss?Given the equation of exchange set forth by the quantity theory of money (M×V=P×Q)(M×V=P×Q) , where MM is the supply of money, VV is the velocity of money, PP is the price level, and QQ is real output, which of the statements best defines MM? The average of level of prices for a given basket of goods. The total amount of currency, coins, and banking sector. The average number of times a dollar is spent in a given period of time. The quantity of goods and services produced within an econony.
