Money market mutual funds sell shares to investors and use the money to buy
A) overseas assets through foreign direct investment.
B) short-term securities.
C) foreign currency.
D) mortgage-backed securities.
B
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Long-run full-employment equilibrium assumes: a. a downward-sloping production function
b. a downward-sloping long-run supply curve (LRAS). c. the CPI index price level equals the equilibrium wage rate. d. the CPI equals aggregate demand (AD) equals short-run aggregate supply (SRAS) equalslong-run aggregate supply (LRAS).
Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is .75. The federal government now finds that it must increase spending on military goods by $21 billion in response to deterioration in the international political
situation. To sustain full- employment-noninflationary GDP, government must: A. reduce taxes by $28 billion. B. reduce transfer payments by $21 billion. C. increase taxes by $21 billion. D. increase taxes by $28 billion.