The opportunity cost of holding money is measured by the:
a. interest rate
b. liquidity lost by holding money.
c. money supply curve.
d. inflation rate.
e. cost of cashing in financial assets.
a
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Refer to the above figure. If the price level is 80
A) the total planned real expenditures by individuals, businesses, and the government are less than total planned production by firms. B) the aggregate demand curve will automatically shift leading to a stable equilibrium. C) the economy will have economic growth and the new equilibrium price level will be 80. D) the total planned real expenditures by individuals, businesses, and the government exceed total planned production by firms.
A ________ occurs when a country's exports exceed its imports
A) trade surplus B) budget surplus C) trade deficit D) fiscal deficit
The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because
a. larger firms always have lower per-unit costs than smaller firms. b. at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns. c. diminishing returns will be present when output is small, and high AFC will push per-unit cost to high levels when output is large. d. diseconomies of scale will be present at both small and large output rates.
A firm using Baumol's model will do one of the following if the interest rate on short-term securities went up.
A) increase the collection period B) decrease the average cash balance C) increase the average cash balance D) decrease the collection period