Refer to Table 9-2. In Year 2, if savings deposits had been $250 billion instead of $200 billion, M2 would have been
A) $575 billion.
B) larger by $50 billion.
C) smaller by $50 billion.
D) unaffected.
Ans: B) larger by $50 billion.
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Which of the following is the best definition of openness?
a. The average of imports expressed as a share of GDP. b. The average of goods traded in markets expressed as a share of GDP. c. The average of imports and exports expressed as a share of GDP. d. The average trade balance expressed as a share of GDP. e. The average of exports expressed as a share of GDP.
According to the rational expectationists,
A. even if there were a recession or substantial inflation, the best government policy would be to do nothing. B. the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply, lowering the natural level of real GDP. C. at best, government anti-recessionary policies would have no effect whatsoever. D. All of the choices agree with the thought of rational expectationists.
Refer to the graph shown. In the graph, a recessionary gap exists if the price level is:
A. P0 and the aggregate demand curve is AD1. B. P0 and the aggregate demand curve is AD0. C. P1 and the aggregate demand curve is AD0. D. P1 and the aggregate demand curve is AD1.
If the price were $6 each, her consumer surplus would be
Table: Demand and Utility Schedules for packs of scented candles
A. $26.
B. $18.
C. $13.
D. $3.