If the public decides to hold smaller cash balances, this will cause a(n)
a. increase in interest rates.
b. decrease in average paychecks.
c. increase in nominal GDP.
d. increase in velocity.
d
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The formula for the yield to maturity, i, on a discount bond is
A) i = (Face value - Discount price)/Discount price. B) i = (Discount price - Face value)/Discount price. C) i = (Face value - Discount price)/Face value. D) i = (Discount price - Face value)/Face value.
If Mary earns $80,000 in taxable income and pays $40,000 in taxes, her marginal tax rate must be 50 percent
a. True b. False Indicate whether the statement is true or false
A price index in its base year:
A. is always greater than 100. B. is always less than 100. C. is always equal to 100. D. cannot be determined without knowing the price level in the base year.
Which of the following is NOT an inference of the rational expectations hypothesis?
A. Government policy actions that are anticipated have no real effects in the short run. B. Government policy actions have no real effects in the short run unless the actions are unanticipated. C. Government policy actions have no real effects in the long run. D. Government policy actions that are unanticipated have no monetary effects in the short run.