Answer the following statements true (T) or false (F)
1) The M2 money supply is larger than the M1 money supply.
2) The M2 money supply may be larger or smaller than the M1 money supply depending on the
size of small-denominated time deposit balances and money market mutual fund balances
held by individuals.
3) The M2 money supply may be larger or smaller than the M1 money supply depending on the
size of small-denominated time deposit balances and money market mutual fund balances
held by individuals.
4) Currency and coins held by banks are part of the M1 definition of money supply.
5) Gold backs the U.S. money supply.
1) T
2) F
3) T
4) F
5) F
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If the economy were producing at point E and moved to point B the opportunity cost in terms of lost production of outboard motors would be
A. 16 units of outboard motors.
B. 14 units of outboard motors.
C. 12 units of outboard motors.
D. 10 units of outboard motors.
The primary source of revenue for local governments is _____
a. income taxation b. sales taxation c. estate taxation d. property taxation
A consumer buys only food and clothing. If the quantity of food bought increases while that of clothing remains the same, the marginal utility of food will:
a. fall, but not as fast as the marginal utility of clothing falls. b. rise, but not as fast as the marginal utility of clothing rises. c. rise relative to the marginal utility of clothing. d. fall relative to the marginal utility of clothing.
Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month. Recently, you ran
into Tabitha in the grocery store and she tells you that she has rented the larger booth. Tabitha is as rational as any other person. As an economics major, you rightly conclude that A) Tabitha did not have a choice; her sister was overcharging her. B) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $300. C) Tabitha figures that the additional benefit of having her own booth (as opposed to sharing) is at least $450. D) the cost of having one's own booth outweighs the benefits.