If you withdraw currency from your bank savings account, you are
A) increasing M1, decreasing M2.
B) increasing both M1 and M2.
C) decreasing both M1 and M2.
D) not affecting M1 or M2.
E) increasing M1 but not affecting M2.
E
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Answer the following statement(s) true (T) or false (F)
1. The Pareto criterion is a criterion under which any proposal that can be unanimously defeated should be rejected. 2. To be effective, a price ceiling needs only to be enforced. 3. If a tax and a price control have the same effect on the price paid by consumers, then the two policies will create the same deadweight loss. 4. Consumers will benefit from a tariff, because it helps domestic firms and generates revenue for the government. 5. The value of a good is ultimately determined by the amount of labor needed to produce the good.
Suppose the current situation is such that the price level is 120, real GDP is $17 trillion, and GDP along the long-run aggregate supply curve is $16.6 trillion. What will take place to restore the long-run equilibrium?
A) The price level will fall until long-run aggregate supply increases to $17 trillion. B) The price level will fall and money wage rates will rise until real GDP along the long-run aggregate supply curve is $17 trillion. C) Money wage rates will rise until real GDP reaches $16.6 trillion. D) Aggregate demand will increase until both short-run and long-run aggregate supply equal $17 trillion.
The demand for a factor of production depends on the:
a. supply of the factor. b. supply of other factors of production. c. demand for other factors of production. d. demand for the products that it helps to produce.
Which of the following is NOT included in M1?
A. transaction deposits B. currency C. traveler's checks D. saving deposits