On which of the following assets are you most likely to earn interest income?
A. Cash and currency
B. Checkable deposits
C. Money market deposit accounts
D. Gold and other precious metals
E. All of these responses are correct.
Answer: C
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Suppose that $1 U.S. costs $1.50 Canadian. If in St. Louis a CD costs $10 U.S. and in Montreal it costs $15 Canadian, then ________
A) purchasing power parity holds B) Canadians will buy CDs in St. Louis C) Americans will buy CDs in Montreal D) Virgin Records will have an incentive to build more stores in North America
Which of the following is not correct?
a. The regional Federal Reserve Banks play a role in regulating banks and ensuring the health of the banking system. b. The President of the New York Federal Reserve Regional Bank always gets to vote on the decisions made by the Federal Open Market Committee. c. U.S. monetary policy is made by the Federal Open Market Committee. d. The Federal Open Market Committee meets every 12 weeks.
When PAE < Y the economic response for inventories should be:
A. there will be no change in inventories. B. inventories will increase. C. inventories should decrease initially and then sharply increase. D. inventories will decrease.
Briefly comment on the predictions of economists Milton Friedman and Edmund Phelps about the ability to exploit a trade-off between inflation and unemployment
What will be an ideal response?