The transaction demand for money comes mostly from the fact that
A) money is a medium of exchange. B) money has low opportunity cost.
C) money is a store of value. D) money is a unit of account.
A
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If the prices of goods begin to rise rapidly, people may find it difficult to maintain their lifestyles. Explain why
What will be an ideal response?
Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 20 units of clothing but no food. Suppose each has the utility function U = F ? C. The price of clothing is always $1
If the price of food is $3, does a competitive equilibrium exist? If not, what will happen to the price of food?
Which of the following is not true regarding a change in quantity demanded?
a. A change in quantity demanded is shown by a movement along a given demand curve. b. The demand curve shifts whenever the quantity demanded changes. c. A change in the price of a good, other things constant, will lead to a change in quantity demanded. d. The lower the price of a product, other things constant, the higher the quantity demanded. e. A shift of the supply curve might cause a change in quantity demanded.
If a firm can segment its market, and the parts cannot communicate among themselves, then
A) arbitrage can occur. B) prices in the segments will tend to be equal over time. C) arbitrage cannot occur. D) the different elasticities will be equal over time.