M1 refers to:
A. Federal Reserve Notes and gold certificates.
B. currency held by the public plus checking account balances.
C. the largest of the money-supply definitions.
D. bank loans.
Answer: B
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An increase in the discount rate will
A) have an unclear effect on the money supply. B) not affect the money supply. C) decrease the money supply. D) increase the money supply.
Which of the following is a method used by government to cope with the situation in which production of a good creates an external benefit?
A) removing property rights B) subsidizing production C) marketable permits D) running a lottery E) imposing Coasian taxes
Which of the following are NOT included among Gordon's criticisms of Friedman's fooling model?
A) Workers buy many goods on a weekly basis and thus could discover quite quickly that prices had risen. B) Workers could discover movements in the aggregate price level fairly easily. C) The model relied on a non-market-clearing explanation of the labor market. D) Workers would predict higher prices if policies that led to higher prices in the past were used again.
Good X and good Y are substitutes. If the price of good Y increases, then the
a. demand for good X will decrease. b. quantity demanded of good X will decrease. c. demand for good X will increase. d. quantity demanded of good X will increase.