The M1 money supply is composed of:
All coins and paper money held by the general public and the banks
Bank deposits and mutual funds
Checkable deposits and currency in circulation
Bank deposits of households and business firms
Checkable deposits and currency in circulation
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Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars
Indicate whether the statement is true or false
The NAIRU:
A. is difficult to measure. B. can change over time. C. occurs at the economy's level of potential output. D. All of these statements are true.
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and net nonreserve-related borrowing/lending in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate remains the same and net nonreserve-related borrowing/lending balance becomes more positive (or less negative). b. The real risk-free interest rate falls and net nonreserve-related borrowing/lending balance becomes more negative (or less positive). c. The real risk-free interest rate rises and net nonreserve-related borrowing/lending balance becomes more negative (or less positive). d. The real risk-free interest rate and net nonreserve-related borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
According to most economists, the development of markets is:
A. both a necessary and a sufficient condition for development. B. a sufficient condition for development but not a necessary condition. C. a necessary condition for development but not a sufficient condition. D. neither a necessary nor a sufficient condition for development.