An increase in real output (goods and services) is the only explanation for an increase in nominal GDP

Distinguish between comparative advantage and absolute advantage

What will be an ideal response?

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.