Suppose policy makers implement a fiscal expansion that is not fully anticipated by financial market participants. We know that this will
A) always cause stock prices to fall.
B) always cause stock prices to rise.
C) tend to cause stock prices to rise if the LM curve is very flat.
D) tend to cause stock prices to rise if the LM curve is vertical.
C
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What are the functions of money?
What will be an ideal response?
If 60 pesos can be exchanged for $5 in the foreign exchange market, which of the following represents the nominal exchange rate between the two currencies?
A) 12 dollars for 1 peso B) 5 pesos for 1 dollar C) 1 dollar for 60 pesos D) 1 dollar for 12 pesos
If an economy is operating at a point inside the production possibilities curve,
What will be an ideal response?
The M1 money supply is composed of
A. all coins and paper money held by the general public and the banks. B. bank deposits and mutual funds. C. checkable deposits and currency in circulation. D. bank deposits of households and business firms.