Money held for making everyday market purchases represents the
A. Precautionary demand for money.
B. Transactions demand for money.
C. Speculative demand for money.
D. Crisis demand for money.
Answer: B
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The exchange rate system followed by the United States is known as
A) the gold standard. B) a fixed exchange rate system. C) a flexible exchange rate system. D) a barter system.
Once tradable pollution permits have been allocated to firms,
a. the government controls the price of permits. b. firms that can reduce pollution only at high cost will be willing to pay the most for the pollution permits. c. the value of pollution-saving technology will be lower than the market value of a pollution permit. d. the Coase theorem is no longer applicable as a solution to reducing pollution.
The objective of diversification is to reduce risk. How does a person diversify a stock portfolio? How is risk measured?
Suppose that Kelly has a monthly fixed income of $ 1000 and has $200 of her income allocated to buy cookies and movies. Suppose that there is an increase in the price for movies but not in the price for cookies. This will:
A. shift the budget line parallel to the left. B. shift the budget line parallel to the right. C. change the slope of the budget line. D. not affect the budget line because income remains constant.