If the nominal interest rate increases:
A. the velocity of money should decrease.
B. the cost of holding money increases and the velocity of money should decrease.
C. the cost of holding money decreases.
D. the cost of holding money increases.
Answer: D
You might also like to view...
Scarcity refers to a situation in which unlimited wants exceed the limited resources available to fulfill those wants
Indicate whether the statement is true or false
Recent data has shown that income and volunteer time are positively related. Assuming that volunteer time is included in leisure time, what could explain this observation?
A) Higher income individuals view leisure as a normal good such that the income effect dominates the substitution effect. B) Higher income individuals view leisure as a normal good such that the substitution effect dominates the income effect. C) Higher income individuals view leisure as an inferior good such that the income and substitution effects both increase leisure time. D) Both A and C.
Foreign investment can be economically beneficial for all of the following reasons except:
A. increases the GDP of the host country by giving it access to additional resources. B. increases the GDP of the investing country by providing it with ways to earn higher returns on its capital. C. makes the world a more efficient place by moving capital from places with low returns to places with high returns. D. it always leads to a higher interest rate.
Compared to the rest of the world, the United States spends a larger percentage of its GDP on Social Security than any other country
Indicate whether the statement is true or false