The demand for reserves increases as the price level rises because
A. people want money to buy goods that will appreciate with inflation.
B. people need more money to finance transactions.
C. the opportunity cost of holding money increases.
D. higher prices reduce the value of dollar assets.
Answer: B
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A trade imbalance occurs when:
A. the quantity of imports equals the quantity of exports, but are large relative to total output. B. a country does not import or export any goods or services. C. exports from and imports to a country suddenly decline. D. the quantity of a country's exports differs significantly from the quantity of imports.
A system financed primarily through retrospective fee-for-service insurance reimbursement is:
a. A closed system. b. An open-ended system. c. A cost-plus system d. An efficient system. e. Both b and c.
Assume that there is an unexpected increase in the demand for U.S. dollars in Switzerland. If the foreign currency price of the U.S. dollar is fixed, the U.S. Federal Reserve must intervene in the foreign exchange market such that:
a. the supply of U.S. dollars increases. b. the U.S. demand for the Swiss franc falls. c. the supply of U.S. dollars decreases. d. Swiss imports from the United States are reduced. e. the Swiss currency is devalued.
The situation where women tend crops and raise children while men hunt is often found in a
a. mixed economy b. market economy c. command economy d. traditional economy