Checking account balances are included in:
A. M1 only.
B. M2 only.
C. both M1 and M2.
D. neither M1 nor M2.
Answer: C
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The table above shows the PPF of an island community. Choose the best statement
A. Suppose that this community produces 3 pounds of fish and 20 pounds of berries. If it decides to gather more berries, it faces a tradeoff. B. When this community produces 4 pounds of fish and 12 pounds of berries it faces a tradeoff, but it is inefficient. C. Suppose that this community produces 5 pounds of fish and 0 pounds of berries. If it decides to gather some berries, it will get a free lunch. D. If this community produces 3 pounds of fish and 22 pounds of berries, production is efficient but to produce more fish it faces a tradeoff.
Dollarization is a policy action that
A) tries to stabilize the value of the local currency vs. the U.S. dollar. B) adopts the currency of another country as the national medium of exchange. C) mimics policy actions taken by the U.S. Federal Reserve. D) outlaws the holding of foreign currencies other than the U.S. dollar.
An unintended byproduct of a market exchange that is allocated outside the market system is _____
a. a restrictive covenant b. an externality c. a pollution right d. an external damage
A currency that is pegged to another currency is usually changed on a supply-and-demand basis.
a. true b. false