In sixteenth century Europe, commodity money was almost exclusively gold and silver coins. After the Spanish conquest of Latin America, there was a sudden influx of additional gold and silver. This resulted in which scenario?

a. The European economy of that day suffered from periods of horrible inflation.

b. The European economy of that day underwent periods of debasement.

c. The European economy of that day was greatly enhanced.

d. The European economy of that day remained fairly stable, as other factors offset the influx of new money.

Which of the following are included in the M1 definition of the money supply?

a. Currency, checkable deposits, and money market accounts

b. Currency and money market deposit accounts

c. Small time deposits and currency

d. Currency, demand deposits, and other checkable deposits

The advantage of municipal bonds over corporate bonds increases as the federal marginal tax rate

a. decreases.

b. increases.

c. is eliminated.

d. remains unchanged.