The difference between M1 and M2 is given by which of the following?
a. M1 is limited to checkable deposits, whereas M2 contains currency.
b. M1 is made up of currency and checkable deposits, whereas M2 contains M1 plus savings deposits and small time deposits.
c. M1 includes only currency, whereas M2 contains M1 plus checkable deposits.
d. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver.
b
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The slope of the consumption function is
A) equal to the MPC and is equal to 1. B) not equal to the MPC and is equal to 1. C) equal to the MPC and is less than 1. D) equal to the MPC and is greater than 1. E) not equal to the MPC and is less than 1.
As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer
A) This situation illustrates increasing opportunity cost. B) As a result, we should specialize in the production of DVD players. C) The production possibilities frontier for computers and DVD players is a straight line. D) DVD players will be more highly regarded by consumers than computers.
Two assumptions made in Gordon's early presentation of the IS-LM model were that the Federal Reserve has ________ control of the money supply and that the money demand function ________ subject to instability
A) precise, is B) precise, is not C) imprecise, is D) imprecise, is not
Currently, the price of gold is
A) fixed by the United States. B) adjusted periodically by the IMF. C) adjusted periodically by the World Bank. D) determined in the market by demand and supply.