If households in the economy decide to take money out of savings account deposits and use this money to buy real estate, this will initially   A. not change M1 and decrease M2.   B. decrease M1 and decrease M2.   C. decrease M1 and not change M2.   D. increase M1 and decrease M2.   E. decrease M1 and increase M2.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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  1. If households in the economy decide to take money out of savings account deposits and use this money to buy real estate, this will initially

      A.

    not change M1 and decrease M2.

      B.

    decrease M1 and decrease M2.

      C.

    decrease M1 and not change M2.

      D.

    increase M1 and decrease M2.

      E.

    decrease M1 and increase M2.

 

QUESTION 7

  1. Suppose the economy is in long run macroeconomic equilibrium and there is a decrease in interest rates. Which of the following will happen in the short run?

      A.

    Output will decline.

      B.

    Employment will decline.

      C.

    Prices will decline.

      D.

    Wages will decline.

      E.

    The aggregate demand curve will shift to the right

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