The reason that people may not want to hold money is
A) the precautionary demand for money and the risk of being robbed.
B) the opportunity cost.
C) the transactions demand makes it unnecessary.
D) due to the direct relationship between money demand and the interest rate.
Ans: B) the opportunity cost.
You might also like to view...
Place point Z on the graph to indicate where the United States economy will most likely operate five years from now if we enjoyed an economic growth rate of 5 percent a year.
The recession of 2008-2009 demonstrated that ________
A) consumption is especially sensitive to changes in the retirement age B) changes in wealth can be a major source of fluctuations in consumption C) as consumers get older, they tend to exhaust all their savings D) permanent income is something of a misnomer
The problem of _____ can arise when a seller cannot obtain reliable information from buyers
a. moral hazard b. adverse selection c. lemons problem d. incomplete information
In the United States, the lifetime distribution of income is more equal than the annual distribution. This statement is:
A. true because the rich have gotten richer and the poor have gotten poorer. B. true because there is considerable income mobility over time. C. false because people tend to stay in the same income quintile over extended periods of time. D. false because the rich have gotten richer and the poor have gotten poorer.