Question

1. The quantity theory of money and prices assumes

   		velocity is constant.
   		the price level is increasing at a constant rate.
   		the price level is constant.
   		real national output is constant.

2. The number of times per year that a dollar is spent on final goods and services defines

   		the income velocity of money.
   		the price index.
   		the money supply.
   		GDP.

3. From the late 1980s to the present, the natural rate of unemployment has

   		held constant.
   		climbed sharply.
   		gradually declined.
   		fluctuated up and down, following the path of the actual rate of unemployment.

4. Dumping is

   		selling a good abroad at a price below cost or below the price charged in the domestic market.
   		exporting goods that are of inferior quality relative to the goods sold in the domestic market.
   		selling a good abroad in huge quantities at a very low price.
   		exporting goods that are sources of pollution.

Answer 1

It shall be noted that the quantity theory of money about the connection between money and prices assumes that the velocity of money is constant.

MV = PY

Where,

M = Money Supply

V = Velocity of Money

Y = Real GDP

P = Price level

Hence, the correct answer is velocity is constant

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The average number of times a dollar is spent on final goods and services during a year is the: income velocity of money

Hence, the correct answer is the income velocity of money

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As observed in the diagram given below, the natural unemployment rate has gradually declined in the period from the late 1980s to the present.

Hence, the correct answer is gradually declined.

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It shall be noted that Dumping in economics refers to the international sale of goods at cheaper prices than the domestic sales price or production costs.

Hence, the correct answer is selling a good abroad at a price below cost or below the price charged in the domestic market