Included in the official U.S. money supply are
a. U.S. government bonds.
b. corporate stocks.
c. check able deposits.
d. All of these.
c. check able deposits.
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Since firms outside an industry cannot have an incentive to enter the industry in equilibrium, firms inside a monopolistically competitive equilibrium must be making zero profit.
Answer the following statement true (T) or false (F)
As interest rates rise, people tend to hold ______ money; as their incomes rise, people tend to hold ______ money.
Fill in the blank(s) with the appropriate word(s).
The private marginal benefit for commodity X is given by 15 - X, where X is the number of units consumed. The private marginal cost of producing X is constant at 10. In the absence of any government intervention, how much X is produced? What is the gain to society involved in moving from the inefficient to the efficient level of production?
What will be an ideal response?
According to the interest-rate effect, aggregate demand slopes downward (negatively) because
A. lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls. B. lower prices increase the value of money holdings and consumer spending increases. C. lower prices decrease the value of money holdings and consumer spending decreases. D. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases.