Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary base to fall.
b. M2 money supply to fall.
c. M2 money multiplier to fall.
d. Monetary base to remain the same.
.D
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The average investor must weigh the benefits of liquidity against
A) the high taxes generally levied on liquid assets. B) the lower returns on liquid assets. C) the high transactions costs involved in disposing of liquid assets. D) the greater variability in the nominal returns on liquid assets.
Suppose the Fed buys government securities from the public. The liquidity effect of this is that the interest rate will
A) increase. B) decrease. C) remain constant. D) any of the above are possible
If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
A. Price would increase, and quantity would decrease. B. Price would decrease, and quantity would decrease. C. Price would increase, and quantity would increase. D. Price would decrease, and quantity would increase.
Other things equal, appreciation of the dollar:
A. increases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. B. increases aggregate demand in the United States and may decrease aggregate supply by reducing the prices of imported resources. C. decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources. D. decreases aggregate demand in the United States and may reduce aggregate supply by increasing the prices of imported resources.