Which of the following is the largest component of M1?
A) traveler's checks
B) savings deposits
C) checking deposits
D) currency
C
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Analysis of the transmission mechanisms of monetary policy provides four basic lessons for a central bank's conduct of monetary policy. Which of the following is NOT one of these lessons?
A) Rising interest rates indicate a tightening of monetary policy, whereas falling interest rates indicate an easing of monetary policy. B) Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero. C) Avoiding unanticipated fluctuations in the price level is an important objective of monetary policy, thus providing a rationale for price stability as the primary long-run goal for monetary policy. D) Other asset prices beside those on short-term debt instruments do not contain important information about the stance of monetary policy because they are important elements in various monetary policy transmission mechanisms.
Intermediate targets are
A) identical to instruments. B) macroeconomic variables that the Fed can influence that are related to the Fed's goals. C) also known as the Fed's tools. D) macroeconomic variables that never get revised.
If you suddenly have the misfortune of screening positive for lung cancer, then your consumption function will most likely
A. shift upward. B. shift downward. C. not shift, your disposable income does not change. D. not shift, but force you to increase your expenditures along the consumption function.
A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied
a. True b. False Indicate whether the statement is true or false