The demand for money varies:
A. inversely with wealth.
B. inversely with the liquidity of other financial assets.
C. directly with the liquidity of other financial assets.
D. not all with the liquidity of other assets since money is liquid.
Answer: B
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The cost of inflation will be minimized if:
A) the growth rate of inflation equals the rate of growth of wages. B) taxes are increased during the periods of high inflation. C) money supply is increased during times of high inflation. D) the growth rate of inflation exceeds the rate of growth of wages.
Refer to Figure 7-4. With insurance and a third-party payer system, what price do doctors receive for medical services?
A) $25 B) $40 C) $55 D) >$55
The rule of caveat emptor
(a) is the supreme rule throughout our economy today. (b) still exists, but only outside of the extensive framework of government regulations of business. (c) is essentially the only rule with regard to buying and selling in our economy that is consistent with the concepts of freedom and liberty enshrined in our Constitution. (d) is of little importance in our economy today.
In a booming economy, discretionary fiscal policy:
A. can be added to the automatic stabilizers effects of policies already in place. B. often acts counter to the automatic stabilizers that already exist. C. removes the effect of the automatic stabilizers that already are present. D. All of these are true.