Which of the following is included in both M1 and M2?
A) currency
B) savings deposits
C) small-denomination time deposits
D) money market deposit accounts
A
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
An increase in the price level in the economy leads to
A) a leftward shift in the demand for money curve. B) a rightward shift in the demand for money curve. C) a leftward movement along the demand for money curve. D) a rightward movement along the demand for money curve.
The figure above shows the U.S. production function. From 1986 to 2008 the United States experienced major advances in technology as well as an increase in the working-age population. The combined effect can best be shown by a
A) movement from point W to point X. B) movement from point Y to point Z. C) movement from point Y to point X. D) movement from point W to point Z.
As long as it does not shut down, a perfectly competitive firm earns the maximum profit as long as it operates so that
A) its price exceeds its average total cost. B) market demand is inelastic. C) its price exceeds its marginal revenue. D) its marginal revenue equals its marginal cost.