The ________ measure of money contains items that are not direct media of exchange, such as ________
A) M1, checkable deposits
B) M1, savings certificates
C) M2, checkable deposits
D) M2, savings certificates
D
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If you are living in a period of continued high inflation on a fixed income, the cost of the goods and services you buy ____ and your nominal income ____
a. decreases, decreases b. increases, increases c. decreases, remains the same d. increases, remains the same
Marginal-cost transfer-pricing creates incentives for manufacturing to distort MC:
A. upward. B. downward and then upward. C. upward and then downward. D. downward.
Which of the following explains why deflation is bad for consumers?
a. It reduces the purchasing power of money b. It precedes a long recession. c. It creates a spike in unemployment. d. It makes financial decision making more difficult.
Assuming the economy is experiencing a recessionary gap, classical economists predict that:
A. wages will remain fixed. B. monetary policy will sell government securities. C. higher wages will shift the short-run aggregate supply curve leftward. D. lower wages will shift the short-run aggregate supply curve rightward.