The M1 measure of money consists of the sum of:
A. currency, checking deposits, and savings deposits.
B. checking deposits and travelers' checks.
C. currency and travelers' checks.
D. currency, checking deposits, and travelers' checks.
Answer: D
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The Bretton Woods system relied on
A) a flexible exchange-rate system. B) a floating exchange-rate system. C) a fixed exchange-rate system. D) an exchange-rate union.
Consider two alternative worlds: (i) the world works according the real business cycle model, and the central bank acts to stabilize the price level; (ii) the world works according to the New Keynesian sticky price model, and the central bank acts to
make the output gap zero. Which is correct? A) We would prefer to live in world (ii). B) We would prefer to live in world (i). C) The data cannot tell us whether we are living in world (i) or world (ii). D) in either world, the central bank is irrelevant.
When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost,
a. the firm must be earning a positive economic profit. b. the firm may be incurring economic losses c. there is a deadweight loss to society, but it is exactly offset by the benefit of excess capacity. d. new firms will enter the market in the long run.
Country A had a population of 1,000, of whom 600 worked an average of 8 hours a day and had a productivity of 2.5 . Country B had a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0 . Country
a. A had the higher level of real GDP and real GDP per person. b. A had the higher level of real GDP and Country B had the higher level of real GDP per person c. B had the higher level of real GDP and Country A had the higher level of real GDP per person d. B had the higher level of real GDP and real GDP per person.