Which of the following explains why the demand for money curve reveals an inverse relationship between interest rates and the quantity of money demanded?
a. As interest rates rise, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
b. As interest rates fall, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
c. As interest rates rise, the opportunity cost of holding money falls, and people respond by converting their interest-bearing financial assets into cask or checking account balances.
d. As interest rates rise, people find it advantageous to borrow money, which increases the quantity of money demanded.
a
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Marginal revenue
A) cannot be used to determine the profit-maximizing rate of production. B) is the change in total revenues resulting from a change in output. C) is a change in revenue that is immeasurable and non-quantifiable. D) cannot be effectively utilized when analyzing the perfect competitor.
The time necessary to put a desired policy into effect once economists and policymakers acknowledge that the economy is in an expansion or a recession is called a(n): a. recognition lag
b. implementation lag. c. operational lag. d. administrative lag.
Increases in government expenditures and large budget deficits are projected for 2014-2020 . If the economic recovery is weak and growth is sluggish during this decade, this will be
a. supportive of the Keynesian view, but inconsistent with the crowding-out, new classical, and supply-side theories. b. inconsistent with the Keynesian view, but supportive of the crowding-out, new classical, and supply-side theories. c. inconsistent with both Keynesian and non-Keynesian theories. d. supportive of both Keynesian and non-Keynesian theories.
In an aggregate demand and aggregate supply graph, a contractionary fiscal policy can be best illustrated by a:
A. rightward shift in the aggregate supply curve. B. movement along an existing aggregate supply curve. C. leftward shift in the aggregate demand curve. D. rightward shift in the aggregate demand curve.