The relationship between the interest rate and the precautionary demand for money is
A. inverse.
B. positive sometimes and inverse other times.
C. positive.
D. nonexistent.
Answer: A
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Since 1999, the capital account has recorded
A) relatively minor transactions, such as migrants' transfers, and sales and purchases of nonproduced, nonfinancial assets. B) transactions that affect the balance of trade or the balance of services. C) statistical discrepancy between the current account and the financial account. D) transactions that affect net capital flows in the economy.
Jack is near retirement and worried that if the stock market falls he will not be able to wait to take his funds out, and will have to sell at the bottom of the market
Richard thinks the probability of a stock market downturn is the same, but he is only 40 and could therefore wait for another turnaround. They face the same budget line. Jack's risk/return indifference curve A) will be concave; Richard's will be convex. B) will be convex; Richard's will be concave. C) will be tangent to the budget line at a point to the left of Richard's. D) will be tangent to the budget line at a point to the right of Richard's. E) must still be tangent to the budget line at the same point as Richard's.
Which of the following is not assumed to be constant along a money demand curve?
a. The price level b. The interest rate c. Real GDP d. Nominal GDP e. Individual's tastes and preferences
If a consumer is willing to pay $100 for a used vintage record player that is a "cherry" and $30 for a used vintage record player that is a "lemon," the consumer will offer:
A. $100 for any used vintage record player even if the probability that is a "cherry" is 50 percent. B. $30 for any used vintage record player even if the probability that it is a "lemon" is 50 percent. C. $130 for any used vintage record player if the probability that it is a "cherry" is 50 percent. D. $65 for any used vintage record player if the probability that it is a "lemon" is 50 percent.