The demand for money that households keep for emergency purposes is known as the
precautionary demand
You might also like to view...
A major difference between a single-price monopolist and a perfectly competitive firm is that the
A) monopolist can maximize profit by setting the price of the output where demand is inelastic. B) monopolist can always increase its profits by increasing the price of its output. C) monopolist's marginal revenue is less than price. D) monopolist is guaranteed to earn an economic profit.
If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced
a. 10 percent inflation between years 1 and 2 ,and 5 percent inflation between years 2 and 3. b. 10 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3. c. 11.1 percent inflation between years 1 and 2, and 5 percent inflation between years 2 and 3. d. 11.1 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3.
Pure or economic profit is:
A. the amount by which accounting profits exceed normal profits. B. determined by subtracting explicit costs from total revenue. C. the return required to retain entrepreneurial talent in some particular line of production. D. the return to any resource the supply of which is perfectly inelastic.
The first example used to explain comparative advantage used two countries (England and Portugal) and two goods (wine and cloth) to show that
A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. C) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods. D) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods.