What makes up M1? Is M1 larger or smaller than real GDP?
What will be an ideal response?
M1 is the sum of currency held by individuals and businesses plus checkable deposits owned by individuals and businesses plus traveler's checks. All the assets in M1 are accepted as means of payment and so all the assets are money. M1 is much smaller than real GDP. Real GDP is about 7 times larger than M1.
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Refer to the information provided in Table 36.3 below to answer the question(s) that follow. Table 36.3 PointAggregate Income (Y)Aggregate Consumption (C) A 15 19 B 30 23 C 45 27 D 60 31 E 75 35 F 90 39The data in the table was used to estimate the following consumption function: C = 20 + 0.2YRefer to Table 36.3. The error for point C is equal to
A. -2. B. 0. C. +2. D. +4.
If the demand for airline tickets to Fort Lauderdale is price elastic,
a. airline revenue will increase if supply increases b. airline revenue will increase if supply decreases c. a small change in price will cause a large shift in the demand curve d. a large change in price will cause a small shift in the demand curve e. a large change in price will cause a large shift in the demand curve