Of the three motives for holding money suggested by Keynes, which did he believe to be the most sensitive to interest rates?
A) the transactions motive
B) the precautionary motive
C) the speculative motive
D) the altruistic motive
C
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When a government taxes the sale of beer, cooperative surplus ________ and society gets ________
A) increases; richer B) increases; poorer C) decreases; richer D) decreases; poorer
What would happen in an economy if total planned production exceeded total planned real expenditures?
A) Inventories would be depleted, and firms would tend to lower prices. B) Inventories would accumulate, and firms would tend to lower prices. C) Inventories would be depleted, and firms would tend to raise prices. D) Inventories would accumulate, and firms would tend to raise prices.
The United Bank of Glassen only lent money to a limited number of big business houses. After a financial crisis, the bank went out of business. Which of the following reasons could have contributed to the collapse of this bank?
a. Their decision not to lend funds to the Federal Reserve b. Their decision not to diversify their asset portfolio c. Their decision to extend loans to a diversified pool of borrowers d. Their decision to extend mainly short-term loans e. Their decision to unnecessarily scrutinize each borrower's details
The Real GDP of a country is
a. the total income earned by a nation's permanent residents in a given time period divided by the GDP deflator. b. the market value of all final goods and services produced within a country in a given time period, using prices from a "base" year to calculate the market value. c. the market value of all final goods and services produced within a country in a given time period, using prices from the current year to calculate the market value. d. the market value of all final goods and services produced within a country minus losses from depreciation in a given time period. e. none of the above.