The money aggregate M2 includes:
A. savings deposits but not money market deposit accounts.
B. M1.
C. large denomination time deposits.
D. stock and bond mutual fund shares.
Answer: B
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Suppose that you rent a house next to a factory. The factory legally emits a chemical into the air that smells like feet. You now have to spend $300 more per month on air fresheners because the firm pollutes the air. You could move to another house far enough away from the factory, but the rent for that house is $200 more than you now pay. The efficient solution to this problem is that
A. the factory owner should reimburse you $100, the difference between your expenses and the higher rent on the new house. B. you should move to the new house because the additional rent on that new house is less than the additional expenses you incur from living next to the factory. C. the firm should be able to continue to pollute because only one person is being harmed by the factory's pollution. D. the factory owner should compensate you $300 so that you can pay for the additional expenses you incur.
Short-run aggregate supply is greater than long-run aggregate supply in the misperceptions theory if
A) the actual price level is greater than the expected price level. B) the actual price level equals the expected price level. C) the actual price level is less than the expected price level. D) output is less than its full-employment level.
Which of the following is an example of monetary policy?
a. Raising the interest rate b. Decreasing the tax rate c. Increasing the amount of government spending d. Fixing a price ceiling for necessary goods
In the following equation, what does the symbol ? denote?
AE ? C + I + G + (X – M) a. The equation is an estimate. b. The equation is absolute. c. The equation is just a suggestion. d. The equation is just a definition.