A wealthy executive is holding money, waiting for a good time to invest in the stock market. This action would be an example of the:
A. Transactions demand for money
B. Asset demand for money
C. Creation of fiat money
D. Use of money as a medium of exchange
B. Asset demand for money
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Suppose the required reserve ratio is 5 percent and the Fed buys a $10,000 bond. If money is deposited into a commercial bank, what will initially happen to money supply?
a. It will increase by $10,000. b. It will increase by $5,000. c. It will increase by 5 percent. d. It will increase by $200,000.
Economic models are built with
a. recommendations concerning public policies. b. facts about the legal system. c. assumptions. d. statistical forecasts.
Restrictive labor law can create two different groups
A. insiders, who enjoy long-term stable employment, and outsiders, who end up with high unemployment rates. B. insiders, who end up with high unemployment rates, and outsiders, who enjoy long-term stable employment. C. employers, who bear the costs of restrictive labor laws, and workers, who enjoy the benefits of restrictive labor laws. D. employers, who enjoy the benefits of restrictive labor laws, and workers, who bear the costs of restrictive labor laws.
The largest component of planned aggregate expenditure is:
A. investment. B. exports. C. government purchases. D. consumption.