People learn to hold a specific quantity of money for the groceries, theater tickets, gasoline, clothes, film, and other items they habitually purchase. This behavior is representative of the:
A. precautionary demand.
B. speculative demand.
C. transactions demand.
D. volatility demand.
Answer: C
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Suppose, compared to last year, the price of beer has increased 4%, the price of jeans has increased 7%, and the price of video rentals has decreased 1%
On the basis of this data, what can an economist conclude about the rate of inflation in the overall economy? A) Nothing. B) The inflation rate is 4%. C) The inflation rate is 7%. D) The inflation rate is 10%. E) The inflation rate is 11%.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
a. Benefits-received. b. Inexpensive-to-collect. c. Ability-to-pay. d. Fairness of contribution.
A reduced interest rate stimulates investment by
a. improving the prospects for a large profit from new investment b. enabling firms to ignore the opportunity costs of financing new investment c. increasing the opportunity cost of the investment d. reducing the cost of the investment e. signaling the existence of eager buyers
A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements, including which of the following?
a. Tariffs and import quotas usually reduce general economic welfare. b. A large federal budget deficit has an adverse effect on the economy. c. Minimum wage increases unemployment among young and unskilled workers. d. All of the above are correct.