Which would be included in the definition of the money supply? Currency and checkable deposits owned by:
A. the public.
B. the Federal Reserve Banks.
C. the U.S. Treasury.
D. commercial banks.
Answer: A
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If an individual's supply of labor curve is "backward bending," (that is, labor supply falls at high wage rates) then:
a. the substitution effect always dominates the income effect. b. the income effect always dominates the substitution effect. c. the substitution effect dominates at low real wage levels and the income effect dominates at high real wage levels. d. the income effect dominates at low real wage levels and the substitution effect dominates at high real wage levels.
In the aggregate expenditures model, assume that the MPC is 0.75 . An increase in investment spending of $6 billion would produce an ultimate increase in real GDP of:
a. $0.25 billion. b. $0.75 billion. c. $12 billion. d. $24 billion.
Suppose the MPC is .6 and consumption increases by $8 billion. Consequently, total income through the multiplier effect will:
a. $20 billion b. $8 billion c. $15 billion d. $13.3 billion
What is workfare?
(A) A state-by-state grant program of aid to the elderly. (B) A program that requires work in exchange for assistance. (C) Welfare that is limited to preschool-age children. (D) An early poverty program from the 1950s.