Distinguish M1 from M2
What will be an ideal response?
M2 is a broader definition of money that includes assets that are less likely to be used in economic exchanges. M2 includes all the assets in M1 but also includes savings and loan deposits and money market mutual funds.
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The payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing in new capital or not investing in new capital. 
An industry spy comes to firm B and claims to know what firm A has decided. Given that each firm already knows the payoff matrix, how much would this information be worth to firm B?
A. $0. B. $50 million. C. $70 million. D. $30 million.
An increase in the level of prices of goods and services will do what to the long-run aggregate supply curve?
A) not shift the curve at all B) depends upon the long-run aggregate demand curve C) shift it to the right D) shift it to the left
Monetary policy should be countercyclical, which implies that it should be loosened during a recession and tightened during periods of inflation
a. True b. False Indicate whether the statement is true or false
Rational expectations theory assumes that:
A. people behave rationally and that all product and resource prices are flexible both upward and downward. B. firms pay above-market wages to elicit work effort. C. markets fail to coordinate the actions of households and businesses. D. markets are dominated by monopolistic firms.