If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same.
b. M1 falls, M2 remains the same, and the monetary base remains the same.
c. M1 rises, M2 rises, and the monetary base remains the same.
d. M1, M2, and the monetary base rise.
e. M1, M2, and the monetary base fall.
.B
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Which of the following macroeconomic variables does not vary much over the seasons?
A) The nominal money stock B) The unemployment rate C) The real wage D) Average labor productivity
Refer to Table 2.3. Assume that 2010 is the base year. The GDP deflator for 2013 is
A) 67.1. B) 84.5. C) 100.0. D) 118.3.
A bond is
A) a claim on the assets of a corporation such that the purchaser has an ownership right in the corporation. B) anything of value to which the firm has a legal claim. C) a means of assuring that the business firm will pay its debts or fulfill other legal obligations. D) a promise to pay for the use of someone else's money.
With a marginal propensity to save of .4, the marginal propensity to consume will be:
A. 1.0 minus .4. B. .4 minus 1.0. C. the reciprocal of the MPS. D. .4.