Serena transfers $8,000 from her home safe to her savings account. This transaction will
A. decrease M1 and not change M2.
B. increase both M1 and M2.
C. not change M1 and decrease M2.
D. decrease both M1 and M2.
Answer: A
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Economists believe the Cost-Benefit Principle is:
A. a simple but useful model of how people should make choices. B. an interesting intellectual exercise with little applicability to the real world. C. of little use to those who wish to learn how to make better decisions. D. a comprehensive description all the factors that influence people's choices.
In a famous series of commercials, the International Ladies' Garment Workers Union (ILGWU) urged buyers to "look for the union label" and to avoid buying clothes not made by ILGWU members. Through the commercials, the ILGWU tried to attain its goals by
a. restricting the number of ILGWU members. b. featherbedding. c. raising the marginal revenue products of ILGWU members. d. creating lower prices for goods made by ILGWU members.
Since the end of World War II, the economy of the United States has been more influenced by stabilization policy. One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from
a. more severe recessions and depressions. b. higher levels of unemployment and lower rates of employment growth. c. lower rates of growth in real and nominal GDP. d. more persistent periods of inflation.
Innovations in the United States, such as credit cards, debit cards, ATM:s, and online-banking have:
A. decreased the demand for money. B. had no impact on the supply or demand for money. C. increased the supply of money. D. increased the demand for money.