One advantage of a money market mutual fund account is that:
a. it is guaranteed for a larger amount than are FDIC-insured deposits
b. it is a riskless asset.
c. its holders typically earn more interest than they can with a regular bank account.
d. it earns high interest and is liquid.
e. it is completely liquid and riskless.
c
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In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this?
A) There is nothing unusual in this outcome because this is what normally occurs. B) The capital—output ratio probably rose. C) There was an increase in labor input. D) Unemployment probably increased.
Which of the following benefits is counted as income when the official poverty rate is calculated?
a. Medicaid benefits b. food stamps c. public housing benefits d. none of the above e. all of the above
The best government policy to reduce poverty is
a. a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps. b. an expanded welfare program because people must have an additional "need" such as small children or a disability. c. an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter. d. not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.
Why is it desirable, if possible, to use policy to offset the effects of a decrease in aggregate demand?