Along with currency not in banks and deposits in checking accounts, what is another component of the M1 measure of money?
A. debit cards
B. traveler's checks
C. credit cards
D. prepaid accounts
Answer: B
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The marginal propensity to consume (MPC) is computed as the change in consumption divided by the change in:
a. GDP. b. income. c. saving. d. none of these.
In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed and 2 million of the employed are working part-time, half of whom wish to work full-time. The unemployment rate is
A) 9.1 percent. B) 10 percent. C) 14.3 percent. D) 11.1 percent. E) none of the above.
In recent years, the Fed has chosen to target interest rates rather than the money supply because
a. Congress passed a law requiring them to do so. b. the President requested them to do so. c. the money supply is hard to measure with sufficient precision. d. changes in the interest rate change aggregate demand, but changes in the money supply do not.
The multiplier for changes in government spending is calculated as
a. 1/(1+MPC). b. (1 - MPC)/MPC. c. 1/MPC. d. 1/(1 - MPC).