A change in financial technology that reduces the need to hold cash balances ________ the demand for money and ________ the equilibrium nominal interest rate
A) increases; raises
B) decreases; lowers
C) increases; lowers
D) decreases; raises
E) decreases; does not change
B
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According to this Application, the Fed responded to the financial crisis by continuing to develop new programs. One example of this was its announcement that it would now purchase commercial paper, which is the short-term debt of corporations
This is an example of the Fed acting as a A) unit of account. B) store of value. C) medium of exchange. D) lender of last resort.
Which of the following is a CORRECT statement about markets for prohibited goods?
A) Penalizing sellers of an illegal good decreases supply and penalizing buyers decreases demand. B) Penalizing either buyers or sellers of an illegal good decreases the quantity bought. C) Taxing a good at a sufficiently high rate can achieve the same consumption level as prohibition. D) All of the above are correct statements.
Refer to the table below. What is the value of A plus B plus C (A + B + C) or the present value of the first three payments?
The above table shows a 5 year payment plan. Each payment is made at the end of the year, so after one year, a payment of $1,000 is made, after two years another payment of $1,500 is made and so on. The interest rate is 3 percent.
A) $4,215.05
B) $4,100.50
C) $4,426.89
D) $3,998.
On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?
a. The lack of a fireworks display in Yankeeville arises because of an externality. b. The lack of a fireworks display in Yankeeville is a case of market failure. c. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient. d. All of the above are correct.