Credit cards:
A. are financial assets.
B. create money.
C. create the need to hold highly liquid assets.
D. reduce the value of holding money.
Answer: D
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Price leadership is a form of
a. tacit collusion. b. explicit collusion. c. monopolistic competition. d. a cartel policing mechanism.
Table 36-1Suppose the economy of Macroland is described by the following:C = 200 + 0.8 DI (DI = disposable income)I = 300 + 0.2Y?50r (Y = GDP)(r, the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9).For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate atr = 5G = 750T = 0.25YX = 200M = 150 + 0.2YHint: DI = Y?T From Table 36-1, find the budget deficit or surplus for Macroland.
A. 125.50 B. ?93.75 C. ?126.25 D. ?154.75
Which is not a desirable property of money?
An essential function for a bank is to
A. Lend all of its deposits. B. Maximize its assets. C. Minimize its reserve ratio. D. Create money through lending.