A principal disadvantage of conventional checking accounts compared to money market mutual funds is that checking accounts
a. are less liquid.
b. often do not pay interest.
c. cannot be used as a store of value.
d. are not insured by deposit insurance.
b
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If the Fed decides to tighten monetary policy because the inflation rate has risen to a level inconsistent with economic efficiency and long-term growth:
A. in the long run the AD curve will shift to the left and the long-run equilibrium is restored. B. in the short run the AD curve shifts to the left and a recessionary gap is created. C. in the short run the AD curve shifts to the right and a recessionary gap is created. D. in the short run the SRAS curve will shift downward and a recessionary gap is created.
When the price level rises and the money wage rate does not change,
A) the quantity of potential GDP increases because the quantity of real GDP supplied increases. B) the quantity of real GDP supplied increases as more businesses start up and potential GDP does not change. C) existing businesses do not change their level of output. D) profits fall and more businesses fail. E) the quantity of real GDP supplied decreases as more businesses fail and potential GDP does not change.
In the table above, if the wage rate is $12.00 per hour, the profit-maximizing number of workers is
A) 2. B) 3. C) 4. D) 5.
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)