Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the M1 and M2 money supplies?
A. M1 and M2 are both unchanged.
B. M1 falls by $1,000, and M2 rises by $1,000.
C. M1 is unchanged, and M2 rises by $1,000.
D. M1 falls by $1,000, and M2 is unchanged.
Answer: D
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Suppose that the equilibrium price of french fries rises while the equilibrium quantity falls. The most likely explanation for these changes is:
A. an increase in the supply of french fries. B. an increase in demand for french fries. C. a decrease in demand for french fries. D. a decrease in the supply of french fries.
The type of tax receipts that has shown the slowest growth since World War II has been
A) personal taxes. B) contributions for social insurance. C) taxes on production and imports. D) corporate taxes.
For the United States, suppose the value of exported goods is greater than the value of imported goods. This implies that
A) the domestic currency will depreciate. B) the dollar price of foreign currency will increase. C) the country is running a deficit in its balance of trade. D) the country is running a surplus in its balance of trade.
The North American Free Trade Agreement affects trade between
a. the United States, Cuba, and Brazil b. the United States, Canada, and Mexico c. the United States, Puerto Rico, and Cuba d. Brazil, Bolivia, Peru, and Columbia e. China and the United States