The demand for money that arises because holding money over short periods is less risky than holding stocks or bonds is called the
A) transactions demand for money. B) opportunity cost demand for money.
C) liquidity demand for money. D) speculative demand for money.
D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The additional benefit of increasing some activity by one-unit is called the
A) scarcity. B) total benefit. C) opportunity cost. D) marginal benefit. E) unit cost/benefit.
Under a fixed exchange rate system, a balance of payments surplus may:
A) decrease the country's money supply if there is a non-sterilized central bank intervention. B) decrease the country's money supply if there is a sterilized central bank intervention. C) increase the country's money supply if there is a non-sterilized central bank intervention. D) increase the country's money supply if there is a sterilized central bank intervention.
A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $150 . If customers deposit $50 into the bank, what is the value of the money supply?
a. $50 b. $100 c. $150 d. $200