A decrease in the interest rate will cause a(n):
A. Increase in the transactions demand for money
B. Decrease in the transactions demand for money
C. Decrease in the amount of money held as an asset
D. Increase in the amount of money held as an asset
D. Increase in the amount of money held as an asset
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Adam got a job in a multinational company. He was told during the orientation session that he will not be terminated for poor performance during the first six months of his work
Adam immediately decided to put minimum effort into the job during these months. His behavior is an example of ________. A) a positive externality B) moral hazard C) the prisoners dilemma D) the free-rider problem
If Frito Lay, an American snack company, opens a new manufacturing facility in Mexico and produces snacks which are distributed in South America, then Mexico's GDP ________ and U.S. GDP ________
A) increases; does not change B) does not change; increases C) increases; decreases D) increases; increases
If a country has a fixed exchange rate,
A) the equilibrium exchange rate in that market does not respond to changes in supply and demand for currency. B) the exchange rate is allowed to fluctuate in response to changes in the supply and demand for currency. C) central banks have more control over real GDP in the economy. D) central banks must buy and sell their holdings of currencies to maintain a given exchange rate.
Lower prices are always better for society.
Answer the following statement true (T) or false (F)