According to the theory of liquidity preference,
a. if the interest rate is below the equilibrium level, then the quantity of money people want to hold is less than the quantity of money the Fed has created.
b. if the interest rate is above the equilibrium level, then the quantity of money people want to hold is greater than the quantity of money the Fed has created.
c. the demand for money is represented by a downward-sloping line on a supply-and-demand graph.
d. All of the above are correct.
c
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A Nash equilibrium is an outcome where
A) both players are playing their best strategy, given the strategy chosen by the opponent. B) both players are playing their best strategy, regardless of the strategy chosen by the opponent. C) only one player can play his or her best strategy due to the strategy chosen by the opponent. D) neither player has a best strategy to play.
All of the following are examples of off-balance sheet activities that generate fee income for banks EXCEPT
A) foreign exchange trades. B) guaranteeing debt securities. C) back-up lines of credit. D) selling negotiable CDs.
In a situation of free trade
a. countries with comparative advantage will export more than countries with comparative disadvantage import. b. the total quantity of an item exported will be greater than the total quantity imported. c. importing countries will always produce some good, so that total quantity imported is less than total quantity exported. d. the total quantity of an item exported will equal the total quantity imported.
A monopolistically competitive firm that is incurring a loss will produce in the short run as long as the revenue the firm receives is sufficient to cover
A. advertising costs. B. variable costs. C. fixed costs. D. marginal costs.