Which of the following is true?
a. Checking account deposits and time deposits constitute assets of banks.
b. M2 includes M1, plus saving accounts, time deposits (except for some large-denomination certificates of deposits), and money market mutual funds.
c. reserves times the required reserve ratio equals deposits.
d. Money is destroyed when banks make loans.
Question 2
New classical economists believe that:
a. market failure on a large scale is possible.
b. disequilibrium in commodity markets demand government intervention.
c. people are completely aware and informed about everything that is happening.
d. wages are fixed in the short run.
e. people purposefully substitute non-labor activities for work during recession.
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