Why do individuals choose to hold part of their wealth in money rather than in other types of assets? Discuss the benefits and costs of holding money
Money is the most liquid of all assets and can be used directly for buying goods and services. The benefit from holding wealth in the form of money is the ability to buy goods and services. The cost of holding money is the nominal interest rate, an opportunity cost. A person who holds wealth in the form of money gives up the interest that could have been earned if the money had been placed in an interest-earning asset.
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The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused
A) the adoption of expansionary policies to return to growth. B) large capital inflows to service the debt. C) the adoption of strongly contractionary policies to reduce consumption and government deficits. D) an intensification of industrial policies targeted on import substitutes. E) a reduction in inequality.
Which of the following ideas is illustrated by the production possibilities curve [PPC]?
a. There are no limits on the total production feasible in an economy. b. An economy need not decrease the production of one commodity to increase the production of another. c. It is possible to satisfy unlimited wants in an economy through proper investment in research and development. d. When an economy chooses to produce a combination of goods and services, other combinations of goods and services are sacrificed. e. An economy can specialize in the production of only one good.
In game theory a listing of the rewards or punishments that each player will receive for each possible combination of strategies is called
a. the marginal strategy schedule b. the payoff matrix c. strategic planning d. the input-output matrix e. the game listing payoff
Suppose Japanese real interest rates fall. Typically, we should expect a ____________ shift of the U.S. AD curve with a ___________________ shift in United States real interest rates
A) rightward; larger B) rightward; smaller C) leftward; larger D) leftward; smaller