Which of the following is included in M1?
A. Currency in a bank's vault.
B. Currency in circulation.
C. Credit card balances.
D. All of the choices are correct.
Answer: B
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For a firm in a perfectly competitive labor market
A) W > MFC. B) W < MFC. C) W > MRP. D) W = MFC.
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:
a. elastic. b. inelastic. c. of unitary elasticity. d. 0. e. inferior.
According to the Taylor Rule, if current inflation is 2.5 percent, the target inflation rate is 2 percent, and output is 1 percent above potential, the Fed should target the federal funds rate at 5.25 percent.
Answer the following statement true (T) or false (F)
The maximum quantity that an economy can produce, given its existing levels of labor, physical capital, technology, and institutions, is called:
a. real GDP b. potential GDP c. aggregate supply d. aggregate demand