Which one of the following is TRUE?
A. Transaction deposits are counted in M2 but are not included in M1.
B. Balances in money market deposit accounts are counted in M1 but are not included in M2.
C. Most of the U.S. currency in existence circulates outside U.S. borders.
D. Traveler's checks are not considered to be money because they are not valid unless signed.
Answer: C
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Policymakers in a country with a balance of payments surplus may not want to see their country's currency appreciate because this would
A) hurt consumers in their country by making foreign goods more expensive. B) hurt domestic businesses by making foreign goods cheaper in their country. C) increase inflation in their country. D) decrease the wealth of the country.
The price of dog collars has gone down, and all other variables have remained constant. This change can be shown graphically as a:
A. movement along the demand curve to the right. B. movement along the demand curve to the left. C. shift in the demand curve to the right. D. shift in the demand curve to the left.
Which of the following will NOT cause the public debt to change?
A. government budget surplus B. government budget deficit C. an amount of tax collection by the government more than it spends D. balanced budget
If a firm collects $90 in revenue when it sells 4 units, $100 in revenue when it sells 5 units, and $105 in revenue when it sells 6 units, then one can infer the firm is a:
A. perfect competitor. B. monopolist. C. price taker. D. profit maximizer.