Currency held by the public$450 billionDemand deposits220 billionOther checkable deposits170 billionTraveler's checks2 billionSavings deposits800 billionSmall time deposits50 billionMoney market mutual funds170 billion
According to the information in Table 16.1, M2 is equal to:
A. $840 billion.
B. $1,062 billion.
C. $1,692 billion.
D. $1,862 billion.
Answer: D
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What will be an ideal response?
Which of the following represents the chain of causation for contractionary monetary policy?
A. A decrease in investment increases the interest rate, which decreases the money supply, which decreases real GDP. B. An increase in the money supply reduces the interest rate, which increases investment, which decreases real GDP. C. A decrease in real GDP decreases investment, which decreases the money supply, which increases the interest rate. D. A decrease in the money supply increases the interest rate, which decreases investment spending, which decreases real GDP.
The free-rider problem is larger for private goods than it is for public goods.
Answer the following statement true (T) or false (F)
Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from:
A. point a to point c. B. point c to point b. C. D2 to D0. D. D1 to D2.