Currency and checkable deposits are
A. debts of the Federal Reserve Banks or of financial institutions.
B. the major components of the M3 definition of the money supply.
C. of intrinsic value that determines the relative worth of money.
D. redeemable for gold and silver from the Federal Reserve System.
Answer: A. debts of the Federal Reserve Banks or of financial institutions.
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One of the main causes of economic inequality in Latin America is the
A) failure of governments to support urban consumers. B) lack of progress in raising agricultural productivity. C) lack of governmental interest in solving the problem of inequality. D) focus of governments on agricultural exports to the detriment of food production. E) oil crisis of the 1970s.
In the quantity theory of money:
a. the price level is a function of the supply of money. b. the supply of money is a function of the price level. c. the money supply and the price level are inversely related. d. the money supply is controlled by the government.
In the IS-LM model, changes in taxes initially affect planned expenditures through:
What will be an ideal response?
The graph above shows the relationship between consumption and income. Which of the following statements is correct?
A. The marginal propensity to consume in the economy shown is greater than 1
B. The marginal propensity to consume varies across income levels
C. The average propensity to consume at income level K is given by KM divided by KN
D. The marginal propensity to consume can be calculated by dividing LM by 0K