The primary purpose of a budget is to
A) figure out how to purchase only items that are needed to sustain life.
B) make sure you get the most out of your income by spending wisely and saving regularly.
C) figure out how to borrow more so you can increase your current consumption.
D) make sure that you do not spend too much money on nonessential items like recreation and vacations.
B) make sure you get the most out of your income by spending wisely and saving regularly.
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If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same. b. M1 falls, M2 remains the same, and the monetary base remains the same. c. M1 rises, M2 rises, and the monetary base remains the same. d. M1, M2, and the monetary base rise. e. M1, M2, and the monetary base fall.
Among the disadvantages of financing through stock is that
a. the issuance of bonds or commercial paper provides a predictable fixed cost for repayment in contrast to stocks, which represent a stake in the company's future profits b. the costs associated with issuing stocks and all ancillary activities can make issuing common stock more inexpensive than issuing preferred stocks or debt instruments c. all investors see issuing new stock as a negative sign that the company has to sell more of itself in order to survive d. all of these e. none of these
How will the exchange rate (foreign currency per dollar) respond to an increase in the relative rate of productivity growth in Canada in the long run?
A) Exchange rates will rise. B) Exchange rates will fall. C) Exchange rates will be unaffected by changes in the relative rate of productivity growth in Canada, both in the short run and in the long run. D) The exchange rate will be affected in the short run, but not in the long run.
If improvements in technology have reduced the cost of producing personal computers, you accurately predict that in the market for personal computers, there will be a(n)
A. increase in the quantity supplied of personal computers, a reduction in the price, and an increase in the quantity demanded. B. increase in the supply of personal computers, a reduction in the price, and an increase in the demand. C. increase in the supply of personal computers, a decrease in the price, and an increase in the quantity demanded. D. decrease in the supply of personal computers, an increase in the price, and a decrease in the demand.