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.
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.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 5CQQ
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Question
-
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
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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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