The focus for most central banks today is:
A. the quantity of M2.
B. interest rates.
C. controlling the size of the money multiplier.
D. the quantity of M1.
Answer: B
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Brian is paid monthly and typically takes $500 of his pay in cash to spend throughout the month, and the rest he leaves in an interest-bearing checking account. With the recent inflation, Brian finds it necessary to go to the bank every week, withdrawing $125 each time, so that his money can earn interest for as long as it can before Brian needs to withdraw it. The added hassle of going to the bank more often in response to inflation is called a:
A. shoe-leather cost. B. menu cost. C. transactions cost. D. tax distortion.
Explain how the free-market mechanism adjusts prices so that resource allocation is economically efficient.
What will be an ideal response?
Basically the United States' high rate of population growth since the time of George Washington's presidency
A. has been a drag on the United States' rate of economic growth. B. pushed up the United States' rate of unemployment. C. created a growing problem of not enough food to feed everyone. D. provided a market for the United States' farmers and manufacturers.
The prices producers charge to cover the cost of supply may be seen on a:
a. television economic update b. trade journal c. index table of interest rates d. supply curve