The introduction of no-load stock and bond mutual funds has made investing in stocks and bonds increasingly attractive to even the small investor. If, as a result, a large amount of money were shifted from money-market deposit funds to these stock and bond funds, how would the M1 and M2 money supply figures be affected?
a. The M2 money supply would decline; M1 would be unaffected.
b. The M2 money supply would increase; M1 would be unaffected.
c. The M2 money supply would increase; M1 would decline.
d. Both the M1 and M2 money supply figures would increase.
A
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Economics is the study of:
a. the allocation of scarce resources and the ways in which human decision makers utilize those resources. b. the methods that human decision makers use to transform a scarce good into a non-economic good. c. how to operate a business successfully. d. a utopian society. e. how to make money in the stock market.
Assume that an economy's income multiplier is 2 and that this economy is in equilibrium at $500 billion. If the government wants to move this economy to full-employment at $600 billion, while maintaining a balanced budget, it must choose which of the following options?
a. increase government spending and taxes by $100 billion b. decrease government spending and taxes by $100 billion c. increase government spending and taxes by $200 billion d. decrease government spending and taxes by $200 billion e. raising the equilibrium level of income while maintaining a balanced budget is impossible
The value of human capital is determined by
A. the forces of supply and demand for human capital in the market. B. an investment board at the New York Stock Exchange. C. a ranking system of the relative value of different types of education to society. D. a special team of experts in each college and university.
Explain the reasoning behind the shape of the short-run aggregate supply curve in the short run.
What will be an ideal response?