The precautionary demand for holding money arises because
A. expected transactions are completed more easily with debit cards than with credit cards.
B. people want be able to make unexpected purchases or to meet emergencies.
C. credit cards charge low interest rates, which makes money more attractive than credit.
D. people would rather hold money in the form of time deposits than in the form of hard currency.
Answer: B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
A rent ceiling
A) increases the quantity of rental units supplied. B) cannot change the market price. C) set above equilibrium price has no effect. D) generally aims at insuring that landlords receive a higher rent than would otherwise be the case.
Describe three arguments of why some economists object to the predictions of the rational expectations theory and do not subscribe to the conclusions of this approach
For a monopoly, the marginal revenue from selling an extra unit of output is less than the price of that unit.
Answer the following statement true (T) or false (F)