If you withdraw $500 from your savings account and deposit it in your checking account, then M1 will change by _____ and M2 will change by _____
Fill in the blank(s) with correct word
$500, $0
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You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that
A) there might be false causality between inflation and the interest rate. B) higher inflation rates must cause a higher interest rate. C) a scatter diagram of the inflation rate and the interest rate will show a positive relationshi
Which of the following will be recorded as a credit entry in the U.S. balance of trade in merchandise account?
a. A U.S. car manufacturer selling a car to a resident of India. b. A French wine manufacturer selling wines to a distributor in Seattle. c. A U.S. investor investing in Japanese stocks. d. A U.S. steel manufacturer importing iron ore from Zambia. e. A U.S. resident buying diamonds from a diamond manufacturer in Kenya.
Whenever there is excess demand for real balances, short-run adjustment occurs because:
a. savers and investors buy bonds and drive up their prices (drive down nominal rates of interest). b. investors and borrowers sell bonds (convert to cash) and drive down their prices (drive up nominal rates of interest). c. the price level falls to restore real balances. d. aggregate demand is decreased to restore equilibrium.
_____ GDP is the value of output measured in constant prices or GDP adjusted for inflation.
A. Nominal B. Current C. Real D. Green