The money supply consists of
A) currency alone.
B) currency and checking accounts.
C) checking and savings accounts.
D) currency and checking and savings accounts.
E) checking accounts alone.
B
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If aggregate demand intersects aggregate supply in the horizontal range of the aggregate supply curve, then, other things equal, an increase in government spending will:
a. raise real GDP by the amount indicated by the government spending multiplier and leave the price level unchanged. b. lower real GDP by an amount equal to the increased spending and reduce inflation. c. raise the price level and leave real GDP unchanged. d. raise both real GDP and the price level by a multiple of the initial spending increase. e. have no effect on real GDP or the price level, because all private investment will be crowded out.
Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result, a. Skippy's demand for peanut butter will increase, but not until the end of the year. b. Skippy's demand for peanut butter increases today
c. Skippy's demand for peanut butter decreases as he considers buying almond butter. d. Skippy's demand for peanut butter shifts left today.