Suppose the typical household holds $1,000 when the interest rate is 5 percent. When the interest rate rises to 6 percent, the typical household would most likely hold
A) more money because the opportunity cost of holding money is higher.
B) less money because the opportunity cost of holding money is lower.
C) less money because the opportunity cost of holding money is higher.
D) more money because the opportunity cost of holding money is lower.
C
You might also like to view...
If duopolists individually pursue their own self-interest when deciding how much to produce, the amount they will produce collectively will
a. be less than the monopoly quantity. b. be equal to the monopoly quantity. c. be greater than the monopoly quantity. d. Any of the above are possible.
An "increase in the quantity demanded" means that
A) the demand curve has shifted to the right. B) the supply curve has shifted to the left. C) price has declined and consumers therefore want to purchase more of the good. D) given supply, the price of the good can be expected to rise.
If a firm wants to engage in price discrimination, it must have some market power.
Answer the following statement true (T) or false (F)
The Ricardian Equivalence proposition suggests that a tax increase that causes a budget surplus will
A) cause an increase in output. B) cause no change in output. C) cause a reduction in output. D) a reduction in consumption.