The broadly-defined money supply in the U.S., called M2, differs from M1 primarily in its inclusion of
A) bonds of all sorts held by the public.
B) outstanding charge-account balances.
C) savings deposits in financial institutions.
D) Treasury bills held by the public.
E) credit cards.
C
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One of the major political developments of the past several decades is the growing size and economic/monetary integration of the European Union. What effect do you think this will have on international trade between countries?
What will be an ideal response?
Assume that the loans made by the Paris First National Bank contracted from $16 million to $12 million. If the legal reserve requirement was increased from 20 percent to 40 percent, how much would the money supply shrink?
a. $5 million b. $10 million c. $15 million d. $20 million e. $24 million
You are a manager in a perfectly competitive market. The price in your market is $14. Your total cost curve is C(Q) = 10 + 4Q + 0.5Q2. What level of profits will you make in the short run?
A. $40 B. $80 C. $20 D. $60
Which of the following is an immediate effect of an increase in money supply by the European Central Bank of 10 percent?
A. There will be an inflow of foreign capital in the countries belonging to the European Union. B. The product prices in the EU countries will decline drastically. C. The expected future exchange-rate value of the foreign currencies vis-à-vis the Euro will increase. D. The interest rate in the EU countries will increase.