A person puts a $100 bill in the glove compartment of his car in case of an emergency. This is an example of
A) the precautionary demand for money.
B) the transaction demand for money.
C) the emergency investment demand for money.
D) the asset demand for money.
A
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Sizeable budget deficits can be expected in the years ahead because
a. the retirement of the baby boom generation will soon begin to push expenditures on both Social Security and Medicare upward. b. the political incentive structure encourages politicians to spend more revenue than they are willing to tax. c. both a and b are true. d. both a and b are false. Budget surpluses can be expected in the years ahead.
Why does the government sometimes give monopoly power to a company by issuing a patent?
(A) The government does not want competition for the product. (B) The company pays the government for the patent. (C) The company can then profit from their research without competition. (D) The company makes a product better than anyone else's.
Professor Tabarrok suggests that monetary policy is both an art and a science because of the complexity of answering all of the following questions EXCEPT:
A. how to use monetary policy tools. B. where to apply monetary policy tools. C. when to use monetary policy tools. D. which monetary policy tools to use.
Which would not be characteristic of a capitalist economy?
A. Competition and unrestricted markets. B. Reliance on the market system. C. Government ownership of the factors of production. D. Free enterprise and choice.