The speculative motive for holding money reflects the behavior of people who hold money
a. instead of near money
b. to transact purchases they expect to make
c. as insurance against unexpected needs
d. to speculate in the stock market
e. to take advantage of anticipated or hoped for changes in interest rates
E
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If a decrease in the price of gasoline increases the demand for large cars, then
A) gasoline and large cars are substitutes in consumption. B) gasoline and large cars are complements in consumption. C) gasoline is an inferior good. D) large cars are an inferior good.
Both a perfectly competitive firm and a monopolist:
a. always earn an economic profit. b. maximize profit by setting marginal cost equal to marginal revenue. c. maximize profit by setting marginal cost equal to average total cost. d. are price takers.
Refer to the above graph. A decrease in supply would best be reflected by a change from:
Point 2 to point 1 Point 3 to point 6 Point 5 to point 2 Point 5 to point 1
If households and businesses correctly anticipate the inflation rate, the unemployment rate
A. will be the cyclical rate of unemployment. B. will be inversely related to the expected inflation rate. C. will be the natural rate of unemployment. D. will be positively related to the expected inflation rate.