Explain the three different types of money demand
What will be an ideal response?
Transaction demand refers to the demand for money based on the desire to facilitate transactions, because money makes it easier to conduct everyday transactions. Liquidity demand refers to the desire to hold money to make transactions on quick notice without incurring excessive costs. Speculative demand refers to holding money during periods of economic volatility when money is believed to be a safer asset than stocks or bonds.
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Refer to Figure 12-10. Total revenue at the profit-maximizing level of output is
A) $1,200. B) $2,500. C) $4,800. D) $6,000.
Because of the relationship between a perfectly competitive firm's demand curve and its marginal revenue curve, the profit maximization condition for the firm can be written as
A) P = MR. B) P = AVC. C) AR = MR. D) P = MC. E) P = AC.
Refer to the above figure. If the government requires the natural monopolist to charge the efficient price, it will charge price
A) P5 and sell Q1 units. B) P2 and sell Q1 units. C) P3 and sell Q3 units. D) P1 and sell Q4 units.
If supply decreases and demand increases, then the equilibrium
a. price will decrease and quantity will increase b. price will increase and quantity will decrease c. price will increase and quantity could increase, decrease, or remain the same d. price could increase, decrease, or remain the same and quantity will increase e. price will increase, decrease, or remain the same and quantity will decrease