If banks move a substantial portion of depositors' money from interest-earning checking accounts into money-market deposit accounts, how will the money supply measures be affected?
a. M1 will become smaller, and M2 will become larger.
b. Both M1 and M2 will increase in size.
c. Both M1 and M2 will decrease in size.
d. The size of M1 will be reduced, but M2 will be unchanged.
D
Economics
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Everything else equal, how will a decrease in the interest rate in Mexico affect Mexico's GDP?
What will be an ideal response?
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Refer to Figure 4.7. Which of the following are possible payoffs for this game?
A) 0 points B) +5 points C) -5 points D) All of the above are possible payoffs.
Economics