Some economists have proposed a new definition of money that would better track money demand. One such measure is the MZM or "money zero maturity." What kind of items will be included in this measure?
A) Assets that have no maturity such as cash, checking accounts, and shares of stocks.
B) Assets that can be converted to cash with zero penalty and securities that are issued by the U.S.
government since these are virtually risk free.
C) Any deposits that do not have specified maturity terms, just as long as these deposits are fairly liquid and are used by consumers to pay for transactions.
D) Liquid accounts held by the public, regardless of whether they are classified as M1 or M2 and the
reserves of banks that earn no interest since these could be used to create money.
Ans: C) Any deposits that do not have specified maturity terms, just as long as these deposits are fairly liquid and are used by consumers to pay for transactions.
You might also like to view...
The classical dichotomy states that
A) money is superneutral. B) goods markets are separated from labor markets. C) demand is separate from supply. D) real markets determine nominal outcomes, not the reverse.
A primary emphasis of the Keynesian school is the economy has a tendency to:
A. always create a full-employment level of output. B. always create inflationary pressure at all levels of output. C. eliminate unemployment by lowering wage rates to create an equilibrium in the labor market. D. be in equilibrium at less than full employment.
Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will
a. decrease, and producer surplus in the industry will decrease.
b. increase, and producer surplus in the industry will increase.
c. decrease, and producer surplus in the industry will increase.
d. increase, and producer surplus in the industry will decrease.
If a college student stays home and watches a Netflix movie for $2 rather than going out to a $15 movie, this is an example of the
A. value effect. B. income effect. C. utility effect. D. substitution effect.