By definition, M1 includes:
a. savings accounts.
b. money market mutual accounts.
c. small denomination time deposits.
d. checkable deposits.
QUESTION 2According to Adam Smith, the invisible hand refers to which of the following?
a. The best interests of society (public interest) will occur as an outcome of the market process coordinating the self-interested interactions of buyers and sellers (private interest).
b. Government interference is the invisible hand of inefficiency.
c. Bribes and graft is the invisible hand of inefficiency.
d. The best interests of society will occur as an outcome of careful guidance by government authorities in allocating scarce goods and services.
QUESTION 3If the marginal propensity to consume (MPC) is 0.75, the value of the spending multiplier is:
a. 0.
b. 1.
c. 4.
d. 5.
QUESTION 4Which of the following is not part of M1?
a. Checking accounts.
b. Coins.
c. Credit cards.
d. Paper currency.
QUESTION 5The father of modern economics that wrote The Wealth of Nations is:
a. Karl Marx b. John Maynard Keynes
c. Adam Smith d. Thorstein Veblen
QUESTION 6If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is:
a. 2.
b. 5.
c. 8.
d. 10.
QUESTION 7Which of the following statements is true?
a. Money must be relatively scarce if it is to have value.
b. Money must be divisible and portable.
c. M1 is the narrowest definition of money.
d. All of these.
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