Sophia receives a $400 gift card for her campus bookstore from her parents. Which of the following is true regarding the $400 gift card?
A. It is counted in only M2.
B. Stored-value cards are not counted in either M1 or M2.
C. It is counted only in M1.
D. It is included in both M1 and M2.
Answer: B
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Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because
A) saving has to be greater than consumption for the economy to grow. B) Scrooge was happiest when he was saving money, and happiness is the key to economic growth. C) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits.
Which of the following will decrease aggregate expenditure in the United States?
A) a decrease in the value of the dollar B) a decrease in interest rates C) a decrease in the price level D) a decrease in government purchases