If a person withdraws 500 from his/her checking account and holds ...

[Chloeellawright]

If a person withdraws 500 from his/her checking account and holds it as currency, then M1 will ________ and M2 will ________.
 
  A) not change; increase
  B) not change; not change
  C) decrease; increase
  D) increase; decrease
  E) decrease: decrease

Question 2

Assume weak growth in aggregate demand keeps the economy below potential GDP, so unemployment rises but inflation falls. This explains the ________ slope of the short-run Phillips curve.
 
  A) infinite B) positive C) negative D) zero

[janieazgirl]

Answer to Question 1

B

Answer to Question 2

C

[Chloeellawright]

TYSM

[mochi09]

Gracias!