Problems 26-31

26. M-3,000, P-2, and Y- 6,000, what is velocity? a. 1/2. b. 4. C. 1. d. None of the above is correct. 27. Which of the following is not a tool of monetary policy? a. increasing the government budget deficit b. changing the discount rate c. open market operations d. reserve requirements 28. Brian is the owner of a firm that produces bottled water in Washington state. There are ma such firms in the area. Brian decides that if he pays his workers a wage higher than the go market wage, his profits will increase. Which of the following is a likely explanation for h decision? a. The higher the wage, the more he can charge for his water. b. The higher the wage, the lower will be the cost of obtaining needed supplies c. The higher the wage, the more he will have to monitor his workers for shirking d. The higher the wage, the less often his workers will choose to leave his firm Values of Assets Asset Small time deposits Large time deposits Demand deposits Other checkable deposits Savings deposits Traveler's checks Money market mutual funds Currency Miscellaneous categories of M2 Amount in $Billions 780 1,700 450 370 4950 b. 7075 c. 2485 d. 1705 S 740 880 50 29. Refer to Value of Assets. What is the value of M1 in billions of dollars? & 6295 30. Refer to Value of Assets. What is the value of M2 in billions of dollars? a. 7485 b. 8225 c. 9925 d. 7445 31. Which of the following is not a cause of frictional unemployment? a. the destruction of manufacturing jobs b. a worker leaving a job to find one with better benefits c. minimum-wage laws d. unemployment insurance