The asset demand for money is
A) greater at high interest rates as investors can earn more on their investments.
B) greater at low interest rates, because the opportunity cost of holding money is low.
C) greater at low interest rates, because the opportunity cost of holding money is high.
D) lower at low interest rates, because the opportunity cost of holding money is high.
B
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Answer the following statement(s) true (T) or false (F)
1. Although a sales tax hurts both producers and consumers, their losses are fully offset by the benefits created by the tax revenues. 2. One effect of a tax is that output in the market which is taxed falls. 3. Even if total surplus is maximized, there is still a chance that there will be a deadweight loss. 4. When the Pareto criterion is used to choose between different policies, any recommendation requires unanimous agreement. 5. If the potential Pareto criterion rejects a policy change, then the efficiency criterion will reject it as well.
Refer to Figure 17-2. Suppose the Fed used expansionary policy to push short-run equilibrium to point B. If the short-run equilibrium remained at point B long enough,
A) the economy would move back to point A. B) the short-run Phillips curve would shift down. C) the economy would stay at point B in the long run. D) the short-run Phillips curve would shift up.
Which statement best explains why demand for gasoline is inelastic?
a. Gasoline prices are currently very high. a. There is no substitute available c. Gasoline uses a small portion of a person's income. d. People have already cut back their driving to the minimum.
The law that governs most government regulation of monopoly is
A. the End to Monopoly Act. B. the Sherman Anti-Trust Act. C. the Fair Trade Act. D. the Wagner Anti-Monopoly Act.