In contrast with nominal values, real values refer to nominal values
What will be an ideal response?
corrected for price changes.
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Money market mutual funds invest in
A) residential mortgages. B) commercial real estate. C) long-term government securities. D) highly liquid assets.
Which of the following best describes the chain of events in the money creation process?
A) The monetary base increases. Banks acquire excess reserves which they loan out, increasing deposits and also the quantity of money. The new deposits then create additional excess reserves. B) Currency is drained from the quantity of money into the banking system, where it is lent out. The loans are spent, increasing the currency drain and also the quantity of money. C) Desired reserves increase, encouraging banks to seek new deposits. When the new depositors come in, desired reserves decrease and the quantity of money increases. D) Low interest rates discourage people from holding currency. When they deposit the currency, interest rates rise, increasing the quantity of money.
Adam Smith, in his book, The Wealth of Nations, advocated:
a. socialism. b. an economy guided by an "invisible hand." c. government control of the "invisible hand." d. the adoption of mercantilism.
If a profit-maximizing firm's fixed cost of producing widgets falls,
a. its total cost curve is unaffected. b. its marginal cost curve shifts down. c. the firm will produce more widgets. d. the firm's average profit per widget produced rises.