Jaime transfers $2,500 from his checking account to his savings account. This transaction will
A. not change M1 and decrease M2.
B. decrease M1 and not change M2.
C. increase both M1 and M2.
D. decrease both M1 and M2.
Answer: B
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Employing a general-equilibrium approach, describe the effect of a new law that prohibits steel imports
What will be an ideal response?
The GDP deflator is a measure of the overall change in prices in an economy:
A. based on goods and services valued at constant prices. B. using the ratio of real to nominal GDP. C. based on price-changes determined when output is held constant. D. using the ratio of nominal to real GDP.
Suppose a U.S. importer purchases "Mexican Oaxaca" cheese for $500 . If the present exchange rate is Mexican peso (MXP) 10 per U.S. dollar, and the MXP appreciates 10 percent against the U.S. dollar between the date of purchase and the date of payment, then the peso value of the invoice when payment is due is:
a. MXP 500. b. MXP 550. c. MXP 4,500. d. MXP 5,500. e. MXP 4,450.
In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange comes from
a. net exports b. net capital outflow c. net exports + net capital outflow d. net exports - net capital outflow