Which one of the following is part of the M2 definition of the money supply, but not part of M1?
A. checkable deposits
B. currency held in banks
C. currency in circulation
D. small time deposits of less than $100,000
Answer: D
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The fact that the CPI is a biased measure of the inflation rate means government outlays will
A) increase at a slower rate than the actual inflation rate. B) increase at the same rate as the actual inflation rate. C) increase at a faster rate than the actual inflation rate. D) sometimes increase faster and sometimes increase slower than the actual inflation rate depending on whether the actual inflation rate exceeds 1.1 percent per year or is less than 1.1 percent per year. E) None of the above because the bias in inflation measured using the CPI has nothing to do with government outlays.
Refer to Figure 9.4. If the government establishes a price floor of $40 and purchases the surplus, total consumer and producer surplus will be
A) $15. B) 30 widgets. C) $1,050. D) $1,200. E) $1,350
Arguing that economic growth will eventually stop because we will run out of natural resources:
A. ignores the power of markets to recognize shortages and induce changes in behavior. B. must be correct because scarcity exists. C. will only be correct if growth takes the form of newer, more efficient goods and services. D. is supported today by the fact that richer countries have fewer natural resources.
Entry fees at national parks and monuments are an example of:
A. the benefits-received principle of taxation. B. government bureaucracy and inefficiency. C. the principle of limited and bundled choice. D. the ability-to-pay principle of taxation.