In the above figure, the economy would most likely move from AD1 to AD2 because of

To correct for negative externalities, the government

A) should allow the price system do the correction. B) can impose a tax. C) can provide a subsidy to consumers. D) should create a public good.

If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:

a. M1 rises, M2 rises, and the monetary base remains the same. b. M1, M2, and the monetary base rise. c. M1, M2, and the monetary base fall. d. M1, M2, and the monetary base remain the same. e. M1 falls, M2 remains the same, and the monetary base remains the same.