Suppose your $50,000 certificate of deposit matures and you transfer the funds to your checking account. This causes
A) M1 to decrease by $50,000 and M2 to increase by $50,000.
B) M1 to increase by $50,000 and M2 to remain the same.
C) both M1 and M2 to increase by $50,000.
D) no change to either M1 or M2.
B
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In a Lorenz diagram for income, the line of equality shows
A) the most equitable income distribution. B) how unequally incomes are distributed. C) how much redistribution occurs. D) the income distribution if everyone received the same income.
Suppose a firm has the following total cost function TC = 100 + 2q2. If price equals $20, what is the firm's output decision? What are its short-run profits?
What will be an ideal response?
When the absolute price elasticity of demand equals 2.5, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
Insurance:
A. reduces the risks inherent in life. B. helps individuals avoid certain types of risk. C. increases a person’s expected wealth. D. None of these statements is true.