Some colleges charge for student parking. Currently, your college does not charge for parking but the administration announced a possible charge of $2 per day. You are not sure when the new parking policy will start; therefore you decide to keep a $5 bill in your wallet. You hold to $5 for the:
A. impulsive motive.
B. money creation motive.
C. speculative motive.
D. precautionary motive.
Answer: D
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The following are common errors students make when discussing supply and demand. What is the mistake in each? a. At equilibrium, demand equals supply. b. The quantity of demand is greater than the quantity of supply. c. They move along the line from both ends to an equilibrium in the middle. d. The increase in demand causes an increase in supply.
What will be an ideal response?
If the 1989 salary in 2009 dollars is $147,951, how do we interpret this?
A. The salary earned in 1989 could have purchased the same amount of goods as $147,951 could buy in 2009.
B. It would take $147,951 in 2009 to buy the same amount of goods that was purchased in 1989 with $85,529.
C. Someone earning $85,529 in 1989 would be as well off if he were earning $147,951 in 2009.
D. All of these interpretations are correct.
The natural rate of unemployment is
a. the rate of unemployment caused by frictional plus structural unemployment b. the actual rate of unemployment less structural unemployment c. structural, frictional, and cyclical unemployment d. full employment less structural unemployment e. the civilian population that is out of work and actively seeking a job
Ceteris paribus, as the price of a good or service increases
A. people will buy more of it. B. people will want less of it. C. people will want more of it. D. people will buy less of it.