The amount of money that people wish to hold to use in transactions varies directly with
A. their planned near-term purchases.
B. the interest rate.
C. the money supply.
D. the income tax rate.
Answer: A
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Money is the means of payment in the economy. Examples of money include
a. currency, checking account balances, and credit card limits b. ATM cards, checking account balances, and currency c. travelers' checks and credit card limits d. currency, stocks, and travelers' checks e. currency, travelers' checks, and personal checks
A consumer chooses an optimal consumption point where the
a. marginal rate of substitution is maximized. b. slope of the indifference curve exceeds the slope of the budget constraint by the greatest amount. c. ratio of the marginal utilities equals the ratio of the prices. d. All of the above are correct.
What can be concluded about the total profit?
a. It would be greater if the cartel members raised their output.
b. It would be greater if the ATC was higher.
c. It would be shared by the cartel members.
d. It would be maximized at P* = ATC.
Define the following terms and explain their importance to the study of macroeconomics. a. velocity b. equation of exchange c. monetarism d. automatic stabilizer
What will be an ideal response?