Most payments in the United States for goods and services are made using
A) currency. B) traveler's checks.
C) checking account deposits. D) gold.
C
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To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the discount rate. B) buy Treasury securities. C) raise the required reserve ratio. D) lower bank taxes.
If an investor is certain that market interest rates will decline in the future, which of the following will she be most likely to purchase?
A) a six-month government bill B) a two-year government note C) a ten-year government bond D) a fifty-year government bond
If velocity remains constant, which of the following examples would cause inflation?
a. Money supply increases by 8 percent; real GDP increases by 6 percent. b. Money supply increases by 5 percent; real GDP increases by 5 percent. c. Money supply increases by 4 percent; real GDP increases by 7 percent. d. Money supply increases by 9 percent; real GDP increases by 10 percent.
A deadweight loss occurs ________ in a market.
A. only when there is overproduction B. when there is underproduction or overproduction C. when there is efficient production D. only when there is underproduction