The balance owed on credit cards in the United States in 2014 was $880 billion. When consumers pay off this balance in full,
A) M1 will decrease by $880 billion.
B) M1 will remain unchanged but M2 will decrease by $880 billion.
C) neither M1 nor M2 will change.
D) M1 will increase by $880 billion.
C
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The CPI is calculated
a. monthly by the Department of Commerce. b. monthly by the Bureau of Labor Statistics. c. quarterly by the Department of Commerce. d. quarterly by the Bureau of Labor Statistics.
Policy makers often use taxes and subsidies to address market failure in medical care. A good example of this policy is the tax exemption to encourage employers to offer insurance to their workers. Which statement is true about this tax policy?
a. The policy encourages employees to purchase the amount of insurance they would choose to buy without the incentive. b. The policy has resulted in employees demanding more than the optimal level of insurance coverage. c. The policy has led to the market providing the optimal level of medical care. d. The policy provides conclusive evidence that government action improves market outcomes. e. The policy had little effect on the expansion of employer-sponsored insurance.
If the inflation rate falls fro 4% i 2005 to 2% in 2006, then
What will be an ideal response?
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.