A reason that economists keep an eye on both M2 and M1 is because:
A. M2 is more accurate than M1.
B. both fluctuate widely and frequently in total dollar value.
C. money market accounts are sometimes used like checking accounts and sometimes used like savings accounts.
D. during a recession, M1 is meaningless.
Answer: C
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There is substantial evidence that people base their consumption decisions more on their current income than on the average income they expect to receive over a long period of time
a. True b. False Indicate whether the statement is true or false
GDP can be calculated by the value-added approach, which
a. is useful in avoiding double counting. b. includes only the value-added portion from the sale of goods and services. c. includes the revenue a firm receives from selling a product minus the amount paid for goods purchased from other firms. d. All of the above correct.
Central banks in most developing countries:
A. recognize the link between money creation and inflation but often have no other means of financing government expenditures. B. recognize the link between money creation and inflation but don't care about inflation. C. do not recognize the link between money creation and inflation. D. recognize the link between money creation and inflation and exploit this link to reduce their budget deficit.
Refer to the table below for a certain product's market in Econland. If the world price of the product were $6 and an import quota of 400 units were imposed on the product, then the equilibrium price in Econland would be:
A. $6 and the total quantity available in Econland would be 2,200 units
B. $6 and the total quantity available in Econland would be 1,800 units
C. $7 and the total quantity available in Econland would be 2,000 units
D. $7 and the total quantity available in Econland would be 1,800 units