The narrowest definition of the money supply is
A) M1.
B) M2.
C) the difference between M2 and M1.
D) the sum of M1 and M2.
A
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The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the
A) decrease in taxes will be saved by households and not spent, and some portion will be spent on imported goods. B) increase in government purchases will be saved by households and not spent, and some portion will be spent on imported goods. C) decrease in taxes will be saved by households and not spent, and some portion will be spent on consumer durable goods. D) increase in government purchases will be saved by households and not spent, and some portion will be spent on consumer durable goods.
Cartels can detect cheating by
A) reporting each other to government authorities. B) keeping two sets of accounting books, one for internal use and one for sharing with the cartel. C) dividing the market by region so that each cartel member is the only seller in a particular region. D) All of the above.
The demand for Healthy Bars, a health snack bar, is Qd = 10 - (2 × P) and Healthy Bars has a constant average cost of $3 per snack bar. If Healthy Bars wants to package their bars to create an all-or-nothing offer, what is the profit-maximizing number of bars to put into a package?
A) 2 B) 4 C) 10 D) 6
Assume the Fed decreases the money supply and the demand for money curve is fixed. In response, people will:
A. sell bonds, thus driving up the interest rate. B. buy bonds, thus driving down the interest rate. C. buy bonds, thus driving up the interest rate. D. sell bonds, thus driving down the interest rate.