Suppose you withdraw $1,000 from your savings account and put it in your checking account. Briefly explain how this will affect M1 and M2
What will be an ideal response?
M2 will not change and M1 will rise by $1,000. Going from a savings account to checking account would raise M1, but both are part of M2, so M2 would not change.
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What is the national income identity for a closed economy?
What will be an ideal response?
According to Figure 6.1, the period from 1996 to 2011 is particularly remarkable for the slow growth of ________
A) productivity B) labor input C) output D) capital input
Which of the following most clearly illustrates the concept of "derived demand"?
a. An increase in the price of steak causes the demand for poultry to increase b. An increase in the demand for new houses leads to an increase in the demand for construction workers. c. An increase in consumer income leads to an increase in the demand for services provided by the government. d. An increase in the demand for new cars causes the demand for used automobiles to rise.
In the analysis of externalities and market failure, a third party is
a. the party a contractual agreement is meant to benefit b. a person, or persons, who is unintentionally affected by the actions of others c. the third person in a three-way contract d. the person who owns the property right in a contract e. the government attempting to mediate a dispute between the two other parties