The transactions demand for money exists because:
a. people want to maintain a speculative cash reserve.
b. people are insensitive to interest rate fluctuations and prefer to hoard money.
c. people want to be prepared for unplanned emergency expenditures.
d. people prefer cash over bank deposits.
e. people do not receive their income at the same time they spend it.
e
You might also like to view...
The marginal rate of substitution is
a. the slope of a budget constraint. b. always constant. c. the slope of an indifference curve. d. the point at which the budget constraint and the indifference curve are tangent.
If the Federal Reserve decreases the money supply, then initially there is a
a. shortage in the money market, so people will want to sell bonds. b. shortage in the money market, so people will want to buy bonds. c. surplus in the money market, so people will want to sell bonds. d. surplus in the money market, so people will want to buy bonds.
A constant debt-to-GDP ratio in a growing economy is consistent with a:
A. continual surplus. B. falling level of total debt. C. balanced budget. D. continual deficit.
Recall the Application about the price and supply of blueberries to answer the following question(s).According to the Application, the upward jump of the price of blueberries from 2005-2007 followed by the drop in the price of blueberries to $1.44/ lb. shows that blueberries are in:
A. a constant-cost industry. B. an increasing-cost industry. C. a decreasing-cost industry. D. a zero-cost industry.