The asset demand for money is downsloping because:
A. the opportunity cost of holding money increases as the interest rate rises.
B. it is more attractive to hold money at high interest rates than at low interest rates.
C. bond prices rise as interest rates rise.
D. the opportunity cost of holding money declines as the interest rate rises.
A. the opportunity cost of holding money increases as the interest rate rises.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. B; C C. B; A D. D; B
Imagine an economy in which: (1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goods and services, so it would be common to use, say, 50 yollars to buy a pair of shoes; (2) prices are posted in terms of yardsticks, so you might walk into a grocery store and see that, today, an apple is worth 2 yardsticks; and (3) yardsticks disintegrate overnight, so
no yardstick has any value for more than 24 hours. In this economy, a. the yardstick is a medium of exchange but it cannot serve as a unit of account. b. the yardstick is a unit of account but it cannot serve as a store of value. c. the yardstick is a medium of exchange but it cannot serve as a store of value, and the yollar is a unit of account. d. the yollar is a unit of account, but it is not a medium of exchange and it is not a liquid asset.
If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who...
What will be an ideal response?
The real minimum wage has increased significantly over the last 40 years.
Answer the following statement true (T) or false (F)