Question

In: Economics

When the money supply ___________, economic growth is ______, and prices increase predictably over time. a....

When the money supply ___________, economic growth is ______, and prices increase predictably over time.

a.

is shrinking; exponential

b.

grows too quickly; stagnant

c.

is shrinking; steady

d.

grows slowly and steadily; stagnant

e.

grows slowly and steadily; steady

After taking this class, you decide to create a financial plan. You follow your plan all through college, allocating the money from your part-time job to pay for necessities and putting some money into a savings account. After you graduate, you receive a job offer that includes a $40,000 a year salary, benefits, and paid vacation. Based on this salary, you adjust the amount you are putting away in savings by increasing it to $250 a month. This is part of which stage of creating a financial plan?

a.

Taking control of your finances

b.

Creating an emergency fund

c.

Setting goals

d.

Evaluating alternatives for reaching your goals

e.

Implementing, monitoring, and revising your financial plan

Solutions

Expert Solution

1.) Option 'E' is correct. Whenthe Money supply grows slowly and steadily , economic growth is steady and price increases predictably over time.

Option 'A' is wrong asif money supply shrinks ,it's a contactionary measure and growth haults a bit rather than growing exponentially. This is done to control inflation.

Option 'B' is also incorrect, as if money supply growth increases suddenly then it has negative effect on growth as inflation rises incredibly.

2.)Option 'E' is the best possible answer.

Well this could have multiple answer as ,once a person starts earning,he evaluates alternative for reaching its goal and also starts taking control of it's finances. But we see here that the person has been investing through college life only, so he basically has his goals set and also has his finances under control. But, after it starts earning it evaluates , monitors ,implements and revises it's financial plan. So Option 'E' is best possible answer.


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