The money aggregate M1 includes each of the following, except:
A. demand deposits at commercial banks.
B. currency in the hands of the public.
C. currency in the vaults of commercial banks.
D. travelers checks that have been issued.
Answer: C
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In the circular flow model,
A) the government has no direct interaction with either households or firms. B) the government is represented as a separate market. C) the government buys goods and services from firms. D) goods and services are sold by households and purchased by firms. E) factor markets are where goods rather than services are bought and sold.
The Chicago Heights school district study found that
A) teachers have a low occurrence of moral hazard. B) students did much better with a teacher who received merit pay. C) adverse selection results among teachers with poor students. D) teachers did not response to pay incentives.
The neutrality of money is the idea that:
A. virtual money has a neutral effect in the economy. B. hard money has a neutral effect in the economy. C. aggregate price levels do not affect real outcomes in the economy. D. in real terms, it makes no difference who is spending each dollar.
Which of the following is a possible outcome of setting a legal maximum rental rate below the market clearing rental rate?
A. a surplus of rental housing B. a decrease in the quantity of rental housing demanded C. a black market in rental housing D. an increase in the quantity of rental housing supplied