The transaction demand for money comes mostly from the fact that:
A. money is a store of value.
B. money is a medium of exchange.
C. money is a unit of account.
D. money has low opportunity cost.
Answer: B
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Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
A) There is a $20 billion decrease in equilibrium GDP. B) There is a $15 billion decrease in equilibrium GDP. C) There is a $15 billion increase in equilibrium GDP. D) There is a $20 billion increase in equilibrium GDP.
A cartel is
a. a group of oligopolistic firms that engage in formal collusion b. a group of monopolistically competitive firms which charge the same price c. usually legal in the United States d. an agreement among rival firms to set prices independently e. illegal throughout the world
When the average total cost is rising, it must be the case that
a. production must be cut back b. fixed cost is not very high c. marginal cost is greater than average total cost d. average fixed cost exceeds average variable cost e. marginal cost is less than average fixed cost
A minimum wage that is below the equilibrium wage rate does not raise unemployment
a. True b. False Indicate whether the statement is true or false