As debit cards become more popular, individuals will reduce their holdings of currency. Other things constant, how will this impact the money supply?
a. Because more money is held as deposits at banks, the money supply will fall.
b. Because more money is held as deposits at banks, the money supply will expand.
c. Because debit card expenditures are counted in M2 but not M1, the M1 money supply will fall.
d. Because debit card expenditures are counted in M1 but not M2, the M2 money supply will fall.
B
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a. True b. False Indicate whether the statement is true or false
Which of the following is true?
a. People who invest in the stock market are virtually certain to make money. b. Investors in the stock market can reduce their risk if they hold shares of specific stocks for only short periods of time. c. The risk of stock market investments can be reduced through the holding of a diverse portfolio of unrelated stocks over long periods of time. d. In the long run, corporate bonds can be expected to yield a higher real rate of return than ownership of stocks.
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a. True b. False Indicate whether the statement is true or false
In analyzing the decision to shut down in the short run we assume that the firm's fixed costs are
A) implicit costs. B) capital costs. C) nonmonetary opportunity costs. D) sunk costs.