Money held for precautionary reasons is included in the demand for money:
A. partly as transactions demand and partly as portfolio demand.
B. as a third, separate category called the precautionary demand for money.
C. as part of portfolio demand.
D. as part of transactions demand.
Answer: D
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Are checkable deposits really money?
A) No, because they are only commercial bank liabilities, not government liabilities. B) No, because they are ultimately only entries in the balance sheets of commercial banks. C) Yes, because they can be converted on demand into currency or coin. D) Yes, because they can be used to make purchases and pay debts.
Ben quit his job as an economics professor to become a golf professional. He gave up his salary ($40,000 . and invested his retirement fund of $50,000 (which was earning 10 percent interest) in this venture. After all expenses, his net winnings (profit) were $45,000 . Ben's economic profits were
a. $45,000. b. $5,000. c. $2,000. d. zero.
You deposit X dollars into a 3–year certificate of deposit that pays 4.75 percent annual interest. At the end of the 3 years you have $4,229.70 . What number of dollars, X, did you deposit?
a. $3,680.00 b. $3,712.77 c. $3,750.00 d. $3,772.57
The Herfindahl index for a pure monopolist is:
A. 100. B. 10,000. C. 100,000. D. 10.