When interest rates rise, the transactions demand for money usually
A. decreases.
B. increases.
C. decreases initially and then increases to the original position.
D. does not change.
Answer: A
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When studying human behavior, economists assume rational self-interest. This means that people
A. always make the right decisions. B. make decisions based on some desired outcome. C. are quite selfish and are not concerned about others. D. have all the information they need to make a decision.
If the interest rate on a security consists only of the riskless rate, then
A) there is no uncertainty. B) velocity is constant. C) the money supply is fixed. D) the price level is fixed.
Steve and Karen decide to attend the same concert when they are each given free tickets to it. We know that
A) both bear the same opportunity cost because they are seeing the same thing. B) both bear the same opportunity cost because the tickets have the same face value. C) both bear an opportunity cost that depends on what each person is giving up to attend the concert. D) neither bears an opportunity cost since the tickets were given free to them.
Which of the following does not contribute to low farm productivity in poor nations?
A. Limited infrastructure. B. Lack of machinery. C. Inferior technology. D. Lack of effort.