Why would corporations want to achieve zero balances in their checking accounts?

( )to earn more interest (x)to avoid paying taxes ( )to keep a low profile ( )to circumvent banking regulations

"Transactions" money is money used as a

(x)store of value ( )unit of account ( )medium of exchange ( )standard of deferred payment

What happens to the money supply if the deficit is financed by selling bonds to the general public?

(x)the money supply increases ( )the money supply decreases ( )the money supply is unaffected ( )we cannot tell what will happen to the money supply

What happens to the money supply if the deficit is financed by selling bonds to the central bank?

( )the money supply increases ( )the money supply decreases (x)the money supply is unaffected ( )we cannot tell what will happen to the money supply

The quantity of money demanded varies

( )directly with both prices and output ( )inversely with both prices and output (x)directly with prices and inversely with output ( )inversely with prices and directly with output

A sale of government bonds by the central bank should cause

( )bond prices to rise (x)an increase in the supply of money ( )an increase in chartered banks loans ( )a decrease in reserves of the banking system