The components of M2 that are not also in M1:
A. pay lower rates of interest than do the components of M1.
B. sum to an amount that is smaller than the sum of the components of M1.
C. are usable for making payments, but at a greater cost or inconvenience than currency or checks.
D. are not usable for making payments.
Answer: C
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Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000The budget deficit in year 3 is
A. $3,050 billion. B. $295 billion. C. $175 billion. D. $100 billion.
What happened to the peso when the Argentine government succumbed to the market forces in 2002?
a. Revalued b. Devalued c. Depreciated d. Appreciated
If marginal cost is greater than average total cost, then
a. profits are increasing. b. economies of scale are becoming greater. c. average total cost remains constant. d. average total cost is increasing.
An expected increase in the prices of consumer goods in the near future will:
A. Decrease (or shift left) in aggregate demand now B. Increase (or shift right) in aggregate demand now C. Decrease in the quantity of real output demanded (or movement up along AD) D. Increase in the quantity of real output demanded (or movement down along AD)