If you take $500 out of a savings deposit and put it into a checking account, the immediate effect (do not consider the money multiplier):
a. M1 rises, M2 remains the same, and the monetary base remains the same.
b. M1 falls, M2 falls, and the monetary base remains the same.
c. M1 rises, M2 rises, and the monetary base remains the same.
d. M1, M2, and the monetary base fall.
e. M1, M2, and the monetary base remain the same.
.A
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Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The loss in consumer surplus due to the tax is:
A. $3.56 million. B. $1.89 million. C. $7.11 million. D. $944,444.
The cartel consisting of Firm A and Firm B can become unstable if: a. the cost of production is identical for the two firms
b. the cost of production of Firm A is lower than that of Firm B. c. the cost of labor in the industry increases by 12 percent. d. both firms switch to a better method of production.
Which of the following is true?
A. If high inflation and sluggish growth have the same cause, they will show up in the economic data at the same time. B. Sluggish growth may show up in economic data before high inflation, even if the two have the same cause. C. High inflation may show up in economic data before sluggish growth, even if the two have the same cause. D. If high inflation and sluggish growth have different causes, they cannot show up in the economic data at the same time.
Which of the following is associated with a contractionary monetary policy?
A. lowering the required reserve ratio B. raising bond prices C. selling bonds D. lowering the differential between the discount rate and the federal funds rate