Suppose the Fed announces that it expects interest rates to fall in the next quarter. What happens to the demand for money today?
A) The precautionary demand for money goes up.
B) The speculative demand for money goes up.
C) The transaction demand for money goes down.
D) The speculative demand for money goes down.
Ans: D) The speculative demand for money goes down.
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i. land ii. labor iii. capital A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
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A) lower; extend B) lower; does not change C) lower; shorten D) raise; extend E) raise; shorten
When is an outcome risky?
What will be an ideal response?
When external costs are present in a market,
a. less of the good will be produced than the amount consistent with economic efficiency. b. more of the good will be produced than the amount consistent with economic efficiency. c. the amount of the good produced will be equal to the amount consistent with economic efficiency. d. corresponding external benefits are always generated.