"By definition, all parts of M2 are money." Is the previous statement correct or not? Explain your answer
What will be an ideal response?
The statement is incorrect. Many of the assets in M2 are money. But not all the assets are money. Some of the savings deposits, time deposits, and money market funds are not means of payment and hence are not money. But they are included in M2 because they are easily converted into money.
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Consider the production possibilities frontier in the figure shown. As more and more cars are produced the opportunity cost of producing more cars:
A. decreases.
B. stays the same.
C. increases.
D. decreases then increases.
Over the past 50 years, the amount given in aid has __________ in dollar terms, ___________ in terms of aid as a share of GDP.
A. increased; but has steadily fallen B. increased; as well as increased C. decreased; but has increased D. decreased; and has steadily fallen
When a new product is introduced in the market, a consumer always wants to see how popular the item becomes before she purchases it. The consumer's behavior is known as
A) overt collusion. B) limit-pricing. C) a network effect. D) a rational decision.
Another term often used to refer to family wealth is:
A. Income B. Net worth C. Salary and wages D. Spending