Which is true about M1?
a. it is the sum of US coins and currency
b. it is the sum of US coins and currency, and checking accounts
c. it is the sum of US coins and currency, checking and savings accounts
d. it is the sum of US coins and currency, checking accounts, savings accounts, and large CDs
Ans: b. it is the sum of US coins and currency, and checking accounts
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As real Gross Domestic Product (GDP) decreases, people hold
A) about the same amount of money since that has been enough in the past. B) less money because they will want to collect interest. C) more money because they will want to increase the amount of savings. D) less money since they will make fewer purchases.
Which of the following is not an example of a price ceiling?
a. The Chinese government sets the price of housing in China below equilibrium. b. The government of the former Soviet Union sets the price on food below those prevailing in the free market. c. In the 1970s, the Nixon administration imposed wage and price controls, thereby keeping wages and prices from rising. d. In the late 1970s, the U.S. government required gasoline to be sold at a price per gallon that was below what would have prevailed in a free market. e. The U.S. government requires that sugar be sold at a price that exceeds the world price of sugar.