If the euro replaces the U.S. dollar as the world's most popular currency, that will likely ________
A) reduce M1, without affecting M2
B) reduce M2, without affecting M1
C) cause a temporary increase in M1
D) affect neither M1 nor M2
E) none of the above
E
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A financial intermediary's main function is to match ________ with excess funds to ________ with a shortage of funds
A) firms; insurance companies B) savers; borrower C) borrower; savers D) governments; households
In 2008, Japan's economy suffered as world economies slowed. If authorities in Japan followed the monetarist viewpoint, ________ to bring the economy back to full employment
A) taxes would be decreased and the money supply should be increased B) nothing should be done C) aggregate supply would shift leftward D) the money supply would be kept growing at a steady pace
For a perfectly competitive firm, profit maximization occurs when
A) marginal revenue equals average total cost. B) marginal revenue equals marginal cost. C) marginal cost is equal to average total cost. D) average total cost is at its minimum.
In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP, then:
a. inventory is depleted. b. inventory is accumulated. c. inventory is unchanged. d. employment increases.