Assuming no other changes, if checkable deposits decrease by $40 billion and balances in money market mutual funds increase by $40 billion, the:
A. M1 money supply will decline and the M2 money supply will remain unchanged.
B. M1 and M2 money supplies will not change.
C. M1 money supply will increase and the M2 money supply will remain unchanged.
D. M1 and M2 money supplies will both decline.
A. M1 money supply will decline and the M2 money supply will remain unchanged.
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Beginning in 2008, The Federal Reserve and the U.S. Treasury Department responded to the financial crisis by intervening in financial markets in unprecedented ways. Briefly summarize the actions of the Fed and Treasury
What will be an ideal response?
In the coordination failure model, we mention sunspots because
A) they influence business cycles. B) apparently irrelevant events may influence business cycles. C) in central banker speak, they are synonymous with open market operations. D) seasonal sunshine has an impact on the business cycle.