Individuals hold precautionary balances in order to
A. Make speculative purchases.
B. Take advantage of future changes in bond prices.
C. Make anticipated expenditures.
D. Pay for emergency purchases.
Answer: D
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Which of the following is a reason that some economists do not agree with the concept of a labor-leisure tradeoff?
a. Wages are paid in dollars and leisure is measured in time, hence there is no way to compare the two. b. On a day-to-day basis, most jobs do not have the flexibility to allow people to weigh the benefits and costs to determine how much they should work that day. c. In the long-run, the supply of labor hours is perfectly inelastic. d. An increase in the wage rate always leads to an increase in the supply of labor hours, therefore the workers do not think of choosing leisure over labor. e. Some people do not work at all, so there is no labor-leisure tradeoff for those individuals.
In the market for euros, the supply of euros (€) is
A) downward sloping, because lower dollar prices of euros mean that U.S. goods are cheaper to Europeans. B) downward sloping, because higher dollar prices of euros mean that U.S. goods are cheaper to Europeans. C) upward sloping, because higher dollar prices of euros means that U.S. goods are cheaper to Europeans. D) upward sloping, because lower dollar prices of euros means that U.S. goods are cheaper to Europeans.
If the competitive firm maximizes profit by selecting labor rather than output, it will earn greater economic profit
Indicate whether the statement is true or false