It is costly to hold money because:
A. deflation may reduce its purchasing power.
B. in doing so, one sacrifices interest income.
C. bond prices are highly variable.
D. the rate at which money is spent may decline.
B. in doing so, one sacrifices interest income.
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What is the typical role of a central bank?
A) It serves as a lender of last resort. B) It serves as a bank for the national treasury. C) It regulates depository institutions. D) all of the above
A consumption bundle is affordable as long as:
A. it is a point that is on an indifference curve that is to the right of the budget line. B. it is a point that falls on the 45 degree line. D. the amount of the good consumed from year to year does not increase.
An example of a price ceiling would be the government setting the price of sugar
A. at the equilibrium market price. B. above the equilibrium market price. C. below the equilibrium market price. D. none of the above
Which of the following would generate a supply of euros in exchange for dollars?
a. American demand for European real estate. b. European demand for U.S. government bonds. c. Americans vacationing in Europe. d. Purchase of French wines by U.S. importers.