Suppose Megan withdraws $75 from her savings account and deposits it into her checking account. This transaction causes M1 to
A. Decrease by $75 and M2 to remain the same.
B. Remain the same and M2 to increase by $75.
C. Increase by $75 and M2 to remain the same.
D. Increase by $75 and M2 to decrease by $75.
Answer: C
You might also like to view...
The marginal propensity to consume is 0.50, marginal propensity to invest is 0.20, and the marginal propensity to import is 0.05. What is the size of the multiplier?
A) 1.00 B) 2.86 C) 3.00 D) 0.50
The outcome of a colluding oligopoly:
A. is more efficient than that of a monopolist. B. is the same as that of a monopolist. C. is less efficient than that of a monopolist. D. is more efficient than that of a competitive oligopoly.
Monopolists may in the long run
a. earn positive economic profit. b. be protected by barriers to entry. c. grow wealthy at the expense of their consumers. d. All of the above are correct.
If the United States imports televisions and the U.S. government imposes a tariff on televisions, then
a. total surplus in the American television market decreases. b. producer surplus in the American television market increases. c. U.S. imports of foreign televisions decrease. d. All of the above are correct.