When individuals shift funds from money market mutual funds to no-load stock and bond mutual funds,
a. the growth rate of M1 will decline but the growth of M2 will be unaffected.
b. the growth rate of M2 will decline but the growth of M1 will be unaffected.
c. the growth rate of both M1 and M2 will decline.
d. the growth rate of both M1 and M2 will increase.
B
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How does a rise in the federal funds rate affect aggregate demand, real GDP, and the price level?
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If a bank has actual reserves of $40,000 and a 20 percent reserve requirement, then the maximum amount of checkable deposits the bank can have if excess reserves are zero is:
a. $100,000. b. $80,000. c. $300,000. d. $20,000. e. $200,000.
A utility-maximizing consumer would not consume more of a good if
a. marginal utility increases as more is consumed b. total utility diminishes as more is consumed c. MU/P < 1 d. MU/P < 1 e. MU/P = 1