Precautionary demand for money will fall when
A. the interest rate rises.
B. the money supply increases.
C. the interest rate falls.
D. government spending falls.
Answer: A
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Which of the following is an example of a trade restriction?
A) Consumers prefer German beer to domestic beer. B) Japan places a tax on all Korean automobiles. C) Domestic wine is more expensive than wine imported from Chile. D) The United States, Canada, and Mexico sign the NAFTA agreement.
The money market is distinguished from the capital market, because
a. The money market is where foreign exchange is traded, and the capital market is where long-term and short-term funds are borrowed and lent. b. The money market is where foreign exchange is traded, and the capital market is where long-term funds (i.e., maturities more than one year) are borrowed and lent. c. The money market is where foreign exchange is traded, and the capital market is where short-term funds (i.e., maturities equal to or less than one year) are borrowed and lent. d. The money market is where short-term funds (i.e., maturities equal to or less than one year) are borrowed and lent, and the capital market is where long-term funds (i.e., maturities greater than one year) are borrowed and lent. e. None of the above.
Policies designed to pay off the national debt will result in:
A. A smaller level of aggregate demand B. Inflation. C. A higher level of aggregate demand. D. A redistribution of income but not wealth.
Refer to the graph shown. If this graph represents a monopoly market, the equilibrium price and quantity will be:
A. $7 and 325, respectively. B. $7 and 750, respectively. C. $10 and 500, respectively. D. $13.50 and 325, respectively.