What is a primary determinant of the asset demand for money? I. the interest rate II. the opportunity cost of holding money III. the supply of money
A) I only
B) III only
C) both I and II
D) both II and III
C
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Unlike the segmented markets theory, the expectations theory attributes the slope of the yield curve to
A) tax considerations. B) the fact that short-term bonds are not perfect substitutes for long-term bonds. C) the market's view of future short-term interest rates. D) the variance in the inflation rates over the business cycle.
When the dollar price of a British pound is $0.80, it is correct to state that an American traveling in England will receive ________ pounds per dollar
A) 1.25 B) 8 C) 80 D) 125
For any two goods, A and B, if MUA divided by PA equals 2.5 and MUB divided by PB equals 4.0, then with given income and prices the consumer should
A) buy more of good A and less of good B. B) buy more of good B and less of good A. C) buy all of good B and no A. D) stop because an equilibrium is achieved.
If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, one possible factor that might have led to this change is
A) an increase in the U.S. interest rate. B) a decrease in the European interest rate. C) the Fed buying dollars. D) the Fed selling dollars. E) an increase in the expected future exchange rate.