What makes up M1? Is M1 larger or smaller than real GDP?
What will be an ideal response?
M1 is the sum of currency held by individuals and businesses plus checkable deposits owned by individuals and businesses plus traveler's checks. All the assets in M1 are accepted as means of payment and so all the assets are money. M1 is much smaller than real GDP. Real GDP is about 7 times larger than M1.
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What do you mean by the term 'equilibrium wage'? a. It is the wage that is determined when potential employers and potential employees are free to transact as they wish. b. It is a wage determined by the government with an intention to narrow the gap between the higher and the lower income groups. c. It is a wage at which the workers refuse to offer labor
d. It is a minimum possible rate that an employer must pay in order to hire a labor. e. It is a wage at which there is an excess supply of workers.
Theories and models are explanations of how things work that help us understand and predict how and why economic agents like consumers, producers, firms, government, etc. behave they way they do
a. True b. False Indicate whether the statement is true or false
Assume that we want to drive our economy out of recession by generating a $400 billion change in real GDP. The MPC is 0.80. Which of the following policy prescriptions would generate the targeted $400 billion change in income?
A. $120 billion increase in government spending and $50 billion increase in tax revenue. B. $140 billion increase in government spending and $70 billion increase in tax revenue. C. $160 billion increase in government spending and $120 billion increase in tax revenue. D. $220 billion increase in government spending and $100 billion increase in tax revenue.
The first antitrust law in the United States was the
A. Sherman Antitrust Act. B. Clayton Act. C. Contestable Markets Act. D. the Federal Trade Commission Act.