The largest component of M1 is:
A. saving and money market accounts.
B. checking accounts.
C. reserves.
D. currency.
Answer: D
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Tax incidence:
A. depends on the relative elasticity of the supply and demand curves in a market. B. depends on whether it is a buyers tax or sellers tax that is being imposed. C. depends on the amount of tax revenue generated once administrative burdens are taken into account. D. depends on whether the tax revenue is greater than the deadweight loss caused by the tax.
Which of the following is the best example of a health-care service with a large public good component?
a. a hair-growing treatment provided to a twenty-five year-old single man b. heart bypass surgery provided to an employee and paid for by employer-funded insurance c. a vaccine that reduces the incidence of a communicable disease d. a hip replacement provided to a senior citizen
Requiring a firm with international operations to follow the standards of its home country instead of those of the foreign country has all of the following advantages EXCEPT
A) it takes care of the fear of a race-to-the-bottom by making it impossible for a home-based company to exploit low standards.
B) it shifts the costs of improved standards to firms and consumers in high-income countries.
C) it removes the threat of domestic firms relocating abroad for low standards and ensures that any relocation that takes place is due to foreign comparative advantage.
D) it avoids the problems of high-income countries dictating what standards are to be used. In this situation, firms that cross national boundaries must conform to whichever standards are higher.
E) it is a comprehensive measure, since it addresses the problem of production in foreign firms as well as firms from high-standards countries that relocate abroad.
Consider a market for coffee that is initially in equilibrium. If tea harvest is bad in a particular year, then identify the most likely impact on the equilibrium price and quantity of coffee.
a. ?The price of coffee will decrease while the quantity of coffee will increase. b. ?There will be no impact on the equilibrium price and quantity of coffee. c. ?The price of coffee will increase, while the quantity of coffee will decrease. d. ?Both the price and the quantity of coffee will increase. e. ?Both the price and the quantity of coffee will decrease