Other things constant, which of the following would cause the M1 money supply to decline?
a. an increase in the quantity of U.S. currency held overseas
b. a shift of funds from interest-earning checking deposits to money market mutual funds
c. a reduction in the general public's holdings of currency outside of banks because debit cards have become more popular and widely accepted
d. a shift of funds from money market mutual funds into stock and bond mutual funds because the fees to invest in the latter have declined
B
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The use of deductibles and coinsurance are examples of attempts by insurance companies to deal with the problem of
A) moral hazard. B) adverse selection. C) failure of policyholders to keep paying their premiums. D) excessive government regulation.
Signaling is
a. actions by the informed party to reveal her true risks b. actions by the informed party to conceal her true risks c. actions by the uninformed party to uncover the true risks d. actions by the uninformed party to conceal the true risks
Which of the following is not a goal of the Fed?
a. Maintaining a high level of employment b. Maintaining stability in interest rates c. Maintaining high prices to encourage production d. Maintaining stability in financial markets e. Maintaining stability in foreign exchange markets
In economic theory, the word "demand" refers to
a. the amount people are willing to purchase at various prices. b. those wants or needs that are urgent or pressing. c. wants that are economic in character rather than social, cultural, or spiritual. d. the desire of persons for a good, regardless of whether they're willing to purchase the good.