Jim transfers money from his money market account to his savings account. This action
a. reduced M1 and increases M2.
b. increases M1 and reduces M2.
c. has no effect on M1 or M2.
d. increases M1 and M2.
c
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Long-lived goods used for producing other goods and services are called:
A. value-added goods. B. consumption goods. C. capital goods. D. non-market goods.
In 1 hour, Robinson Crusoe can either shoot 4 birds or catch 4 fish. A typical native on a nearby island can either shoot 5 birds or catch 10 fish in an hour's time. Which of the following is true according to the doctrine of comparative advantage?
a. Crusoe will be better off if he specializes in either activity and then trades with the natives. b. The natives have a comparative advantage in both shooting birds and catching fish, so Crusoe cannot make himself better off by trading with the natives. c. Crusoe should concentrate on shooting birds and then trade with the natives to obtain fish. d. Crusoe should spend his time catching fish, and he should trade with the natives to obtain birds.
Consider an economy where the growth rate of money supply is 2% and the inflation rate is 2%. If the quantity theory of money holds, the growth rate of real GDP in the economy will be:
A) 2%. B) 4%. C) 1%. D) 0%.
According to your textbook discussion, what best explains the decline in the importance and use of flint?
a. the decline in tobacco consumption b. the adoption of new technologies c. the discovery of new copper resources d. the widespread use of matches e. the discovery of abundant oil resources