Since the 1980s, "NOW" accounts have been included in
A) M1, but not M2.
B) M2, but not M1.
C) both M1 and M2.
D) the monetary base and M1, but not M2.
E) neither M1 nor M2.
C
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Which of the following statements about the ripple effects of monetary policy is FALSE? Monetary policy can
A) raise the federal funds rate, thereby decreasing the quantity of money, raising the real interest rate, and decreasing investment. B) lower the federal funds rate, thereby increasing the supply of loanable funds, and lowering the exchange rate. C) lower the federal funds rate, thereby lowering the real interest rate and increasing aggregate demand. D) raise the federal funds rate and shift the aggregate demand curve leftward. E) raise the federal funds rate, thereby raising the real interest rate and increasing potential GDP.
A point on the production possibilities curve represents a combination of goods that is
a. inefficient. b. efficient. c. unattainable. d. attainable.
The random walk theory indicates that
a. investors can make money by purchasing stocks that are widely expected to earn substantial profits in the future. b. while changes in the prices of specific stocks are difficult to predict, experts are able to forecast the future direction of broad stock market indexes with a high degree of accuracy. c. changes in stock prices are driven by surprise occurrences that are difficult for anyone to predict accurately. d. managed mutual funds will persistently outperform indexed funds.
When an economy's government goes from running a budget deficit to running a budget surplus, the economy's long-run growth prospects are improved
a. True b. False Indicate whether the statement is true or false