Out of the various types of M1 (demand deposits, coins and bank notes), only demand deposits
(a) can be used to generate loans by banks.
(b) serve as a medium of exchange.
(c) serve as a unit of account.
(d) store value.
(a)
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If the economy is inflationary, the Fed would most likely:
a. increase bank reserves by raising the discount rate. b. increase bank reserves by buying government securities c. decrease bank reserves by lowering the discount rate. d. decrease bank reserves by selling government securities. e. decrease bank reserves by lowering the legal reserve requirement.
Firms with union contracts do a large portion of the painting jobs in the county. If the painters' union wins a 12 percent wage increase, what will most likely happen in the non-unionized part of the painters' labor market? a. Nonunion painters will also get 12 percent wage increases
b. There will be no change in the nonunionized part of the painters' labor market because these sectors are not connected. c. Wage rates in the nonunion sector are likely to fall. d. Many nonunion painters will likely find work for a firm with a union contract.
For a perfectly competitive firm,
a. marginal revenue equals total revenue b. total revenue always exceeds total cost c. price always exceeds average total cost d. marginal cost always equals average cost e. the marginal revenue curve and the demand curve lie on top of each other
The fraction of a change in income that is consumed or spent is called
A. the marginal propensity to save. B. average consumption. C. the marginal propensity to consume. D. the marginal propensity of income.