Many economists believe that savings accounts should be added to M1 because they
A. are larger in size than conventional checking accounts.
B. pay larger interest than checking accounts.
C. can be transferred quickly into checkable accounts.
D. are also insured by the federal government.
Answer: C
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Andre Agassi, a star tennis player, is playing the number one player in the world, Roger Federer
Before the match, Agassi decided that he would serve 20 percent of his serves to Federer's backhand, 30 percent of his serves to Federer's forehand, and 50 percent of his serves straight at Federer. In the language of game theory, this is known as: A) a pure strategy. B) a dominant strategy. C) a mixed strategy. D) a maximin strategy.
Stock market fluctuations
a. often go hand in hand with fluctuations in the economy more broadly. b. rarely have anything to do with fluctuations in the economy more broadly. c. have few, if any, macroeconomic implications. d. are attributable to the widespread belief that the efficient markets hypothesis is correct.
Suppose that investment is not very responsive to interest rates, so that a sizable increase in interest rates has only a minor effect on investment. In this case, monetary policy would have:
A. a massive effect on output. B. no effect on output. C. a modest effect on output. D. a substantial effect on output.
If monetary policy makers want to target a negative interest rate, they:
A. need to stop inflation before they do it. B. need to encourage inflation before they do it. C. cannot do so since negative interest rates are impossible. D. need to stop asset inflation before they do it.