The difference between M1 and M2 is that:
A. the former includes time deposits.
B. the latter includes small-denominated time deposits, noncheckable savings accounts,
money market deposit accounts, and money market mutual fund balances.
C. the latter includes negotiable government bonds.
D. the latter includes cash held by commercial banks and the U.S. Treasury.
B. the latter includes small-denominated time deposits, noncheckable savings accounts,
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Which of the following actions by the Fed would lead to an increase in the money supply?
A) an increase in the differential between the discount rate and the federal funds rate B) an increase in the required reserve ratio C) an increase in tax rates D) the purchase of government securities
As a result of a per-unit tax on output in a market: a. the quantity traded increases
b. the quantity traded does not change. c. the quantity traded decreases. d. a surplus is created at the new equilibrium price.
John loves to travel. He would never turn down the opportunity to go on a trip. This means that, for John:
A. the total utility of travel always increases. B. marginal utility of travel never decreases. C. the law of diminishing marginal utility does not apply to travel. D. marginal utility of travel is always zero.
Explain what effect a reduction in future expected output will have on the IS curve and LM curve in the current period
What will be an ideal response?