Which of the following is included in M2?
I. money market mutual funds
II. small-denomination certificates of deposit
A) I only B) II only C) Both I and II D) Neither I nor II
C
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A new bank has reserves of $600,000, checkable deposits of $500,000, and government securities of $100,000. If the desired reserve ratio is 10 percent, the amount of loans this bank can make is
A) $60,000. B) $550,000. C) $50,000. D) $600,000. E) $540,000.
In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
A) The demand curve would shift leftward. B) The demand curve would not shift but the price of dining out would rise. C) The effect on the demand curve is unknown. D) The demand curve would shift rightward. E) The demand curve would not shift but the price of dining out would fall.