In a 100-percent-reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount they held in checkable deposits, then
a. M1 would increase.
b. M1 would decrease.
c. M1 would not change.
d. M1 might rise or fall.
c
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Which of the following generalizations is correct? Demand tends to be
A. relatively more inelastic for a product considered a necessity. B. relatively more inelastic when more substitutes are available for a product. C. relatively more inelastic the more time consumers have to respond to price changes. D. relatively more elastic when the price of a good or service, as a proportion of income, is smaller.
If you post your car on eBay with a "Buy It Now" price of $1,800, you are using money as
A. bank reserves. B. a medium of exchange. C. a unit of account. D. a store of value.
Describe and explain the policy irrelevance proposition
What will be an ideal response?
The average tax rate is calculated as
A) total income divided by the total tax paid. B) the change in income divided by the change in total tax paid. C) total tax paid divided by total income. D) the change in total tax paid divided by the change in income.