The narrowest definition of the money supply, including cash and checking deposits, is known as
A. M0.
B. M1.
C. M payments.
D. currency.
E. real-value money.
Answer: B
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GDP tends to overstate economic well-being because it takes into account ________.
A. improvements in product quality over time B. expenditures undertaken to correct pollution C. nonmarket activities, such as the productive work of homemakers D. illegal activities of individuals and businesses
If a good is inferior, its income elasticity will be
A) 0. B) 1.0. C) negative. D) positive.
The ability of the Federal Reserve to use monetary policy to affect economic variables such as real GDP ultimately depends upon its ability to affect
A) nominal interest rates. B) foreign exchange rates. C) real interest rates. D) tax rates.
Refer to Table 2-4. Assume Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would appear
A) along Dina's production possibilities frontier. B) inside Dina's production possibilities frontier. C) outside Dina's production possibilities frontier. D) at the vertical intercept of Dina's production possibilities frontier.