Economists have long pondered the reasons why people hold money. Some reasons seem to be more important than others. Perhaps not among the most important but still a reason why people demand money is the precautionary motive. This precautionary demand for money refers to the demand
a. to satisfy everyday transactions
b. for investment purposes
c. for speculative purposes such as having money available to take advantage of stock purchases
d. to protect against inflation
e. to cover unexpected events
E
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The solvency of Social Security can be extended if
A. the trust fund invests in government bonds. B. the retirement age is reduced. C. the cap on taxable earnings is lowered. D. the tax rate is increased.
Which of the following models results in the greatest deadweight loss assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Perfect competition
The Grangers were:
a. an organization designed to support the interests of railroads. b. an agrarian society. c. an abolitionist organization. d. a society that petitioned for Prohibition.
Effective contracts between buyers and sellers promote efficiency by making
A. sellers better off at the expense of buyers. B. buyers better off at the expense of sellers. C. both buyers and sellers better off. D. lawyers better off at the expense of buyers and sellers.