Sam has $500 in traveler's checks. He cashes a $100 traveler check, deposits $150 into his checking account at a Savings and Loan Association, and deposits the remaining $250 into a savings account at a credit union. Immediately, ________
A) M1 decreases by $250 and M2 does not change
B) M1 decreases by $400 and M2 increases by $250
C) M1 does not change and M2 increases by $250
D) M1 and M2 do not change
A
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Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 2%; scenario B has an average annual growth of 4%. The nation's real GDP would double in about
A. 36 years under scenario A, versus 18 years under scenario B. B. 36 years under scenario A, versus 9 years under scenario B. C. 18 years under scenario A, versus 9 years under scenario B. D. 25 years under scenario A, versus 12.5 years under scenario B.
A bank's largest liability is its
A) shareholder equity. B) long-term debt. C) short-term borrowing. D) deposits of its customers.
People have a portfolio demand for money in part because:
A. money is needed to pay brokerage commissions. B. there is no cost to holding money which gives it a relatively high return. C. money is part of a well-diversified financial portfolio. D. the return on money is often higher than other financial assets.
Explain how it is possible for the economy to produce at a point beyond its institutional production possibilities frontier (PPF), but not beyond its physical PPF