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 falls, and the monetary base remains the same.
b. M1 falls, M2 remains the same, and the monetary base remains the same.
c. M1 rises, M2 rises, and the monetary base remains the same.
d. M1, M2, and the monetary base rise.
e. M1, M2, and the monetary base fall.
.B
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It has been argued that a monopolistically competitive industry involves "waste" because
A) there is too much product differentiation making shelves too crowded. B) they end up producing to the right of the minimum of the average total cost curve and the price is below the marginal cost. C) the firms do not equate marginal cost to marginal revenue to find the profit maximizing price and output. D) the firms do not produce at the minimum of the average total cost curve and price is above marginal cost.
The correct measure of the deficit is also called
A) the cyclically-adjusted deficit. B) the structural deficit. C) the full-employment deficit. D) the inflation-adjusted deficit. E) all of the above