Typically, when someone borrows money from a bank, M2 ________, because ________
A) increases; the money is held for a while in a liquid form
B) decreases; the money is held for a while in a liquid form
C) does not change; the loan affects only the subcategories within M2
D) decreases; of the decline in the bank's vault cash
E) none of the above
A
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The existence of automatic stabilizers will
A) cause the effects of shocks to aggregate demand to have a larger effect on GDP. B) reduce the recognition lag of discretionary fiscal policy. C) eliminate recessions. D) reduce the size of recessionary and inflationary gaps.
One difference between perfectly competitive markets and single-price monopoly markets is that
A) marginal revenue equals marginal cost for perfectly competitive firms, but not for monopolists. B) marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. C) marginal cost equals average variable cost for perfectly competitive firms but not for monopolists. D) All the above answers are correct.
Unit excise taxes imposed on gasoline, alcohol, and cigarettes are
A) largely paid by the producers because they want to maintain their level of sales. B) largely paid by consumers because they are not very responsive to price changes. C) shared equally between the producer and the consumer. D) paid by the wholesalers of these products.
The U.S. central bank is a financial institution that:
A. has the sole right to accept deposits and make loans. B. sets borrowing and lending in a country. C. has the sole right to issue currency. D. determines what assets will back a currency.