If you transfer $1,000 from your checking account to your savings account:
A) M1 decreases by $1,000, and M2 increases by $1,000.
B) M1 increases by $1,000, but M2 doesn't change.
C) M1 and M2 don't change.
D) M1 decreases by $1,000, but M2 doesn't change.
D) M1 decreases by $1000, but M2 doesn't change
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An example of how GNP accounts for services provided by foreign-owned capital (and GDP does not) is
A) earnings of a Spanish factory with British owners counts only in Spain's GDP. B) earnings of a Spanish factory with British owners counts only in Britain's GNP. C) earnings of a Spanish factory counts in Spain's GNP but are part of Britain's GDP. D) earnings of a Spanish factory counts in Spain's GDP but are part of Britain's GNP. E) earnings of a Spanish factory counts in Spain's GNP but not in Britain's GDP or GNP.
In the long run, a monopolistic competitor's price will equal: a. marginal revenue
b. average total cost. c. marginal cost. d. minimum average total cost.
Investment is considered to be negatively correlated with current real GDP
a. True b. False Indicate whether the statement is true or false
The crowding-out effect stresses that
a. an increase in government expenditures will stimulate aggregate demand and, thereby, help to prevent recessions. b. an increase in taxes will restrain aggregate demand and, thereby, help to control inflation. c. additional government borrowing to finance a larger deficit will increase the demand for loanable funds, causing real interest rates to rise. d. a budget deficit is a highly effective tool with which to combat recessions. e. both a and d are correct.