The reason that velocity increases when interest rates rise is
A. the Fed encourages banks to turn money in faster for recycling, which causes money to move faster.
B. the opportunity cost of saving increases, so people hold smaller cash balances.
C. home mortgage payments increase, so people write larger checks that reduces their checking account balances.
D. the opportunity cost of holding money increases, so average money balances decrease.
Answer: D
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The above figure shows the U.S. market for chocolate. With international trade, ________ is the transfer of surplus from producers to consumers
A) area B +area C + area D B) area B C) area C + area D D) area A E) area E
A perfectly competitive firm's short-run supply curve is the same as its
A) ATC curve. B) MR curve. C) AVC curve. D) MC curve above the minimum of the AVC curve.
Under an exclusive buying arrangement, a retailer agrees not to sell a good at the manufacturer's suggested retail price
a. True b. False Indicate whether the statement is true or false
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a. ignores implicit costs. b. ignores explicit costs. c. ignores the time frame in which costs and benefits are incurred. d. has chosen to undertake all of those activities that add to net gains.