When the price level decreases, ________.
A. holders of financial assets with fixed money values decrease their spending
B. the demand for money falls and the interest rate falls
C. there is a decrease in consumer spending that is sensitive to changes in interest rates
D. holders of financial assets with fixed money values have less purchasing power
Answer: B
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Falling output, in the short run, could be due to:
A. a reduction in aggregate demand. B. an increase in short-run aggregate supply. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
It is claimed that a secondary advantage of mutual funds is that
a. an investor can avoid investment charges and fees. b. they give ordinary people access to loanable funds for investing. c. they usually outperform stock market indexes. d. they give ordinary people access to the skills of professional money managers.
We say that money is a medium of exchange because it represents:
A. something you can use to purchase goods and services. B. something you can directly offer, like any good or service, in exchange for some good or service you want. C. a certain amount of purchasing power held over time. D. a standard unit of comparison.
Bertrand de Juvenal's views on income distribution and fairness can best be described by the statement:
A. A high level of income inequality is necessary to sustain the arts, beauty, education, and civilization. B. Society's goal should be to maximize the welfare of the least well-off, but some inequality is necessary to meet this goal. C. Property rights should be equally distributed, and the market should determine the distribution of income. D. The lesser individuals' duty should be to work for the well-being of the brightest individuals.