The speculative motive for holding money is
A. the desire to hold money to undertake unexpected transactions.
B. the desire to hold money instead of other assets in anticipation of changes in economic conditions.
C. the desire to hold silver instead of gold.
D. the desire to hold money to complete purchases of goods and services.
B. the desire to hold money instead of other assets in anticipation of changes in economic conditions.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of
strawberries. A) raises; increases B) lowers; probably changes, but more information is needed to determine if it increases or decreases C) lowers; increases D) probably changes, but more information is needed to determine if it rises or falls; increases E) raises; probably changes, but more information is needed to determine if it increases or decreases
Assets that are used for money that have intrinsic value generally keep:
A. a more steady value than those that don't. B. just as steady a value as those that don't. C. a less steady value than those that don't. D. a value that is not comparable to other assets.
Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 The opportunity cost of making a calculator for Smith is ________ and for Jones it is ________.
A. 1 computer; 0.5 computers B. 0.10 computers; 0.05 computers C. 10 computers; 20 computers D. 0.6 computers; 1.2 computers