People have a portfolio demand for money in part because:
A. money is needed to pay brokerage commissions.
B. there is no cost to holding money which gives it a relatively high return.
C. money is part of a well-diversified financial portfolio.
D. the return on money is often higher than other financial assets.
Answer: C
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Which of the following is NOT a reason for the weak recovery following the 2007-2009 recession?
A) Recessions started by financial crises are almost always severe. B) The decline in the automobile industry appeared to be structural. C) The collapse of the housing market was long lived. D) The recession was caused by a decline in short-run aggregate supply.
From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
A) Due to their differences in quality and performance, dealer bicycles are not close substitutes. B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. C) Dealers are small sellers and have little control over bicycle prices. D) A and B are correct. E) B and C are correct.
The cost disease of the service sector is evidenced by
a. a failure of the market mechanism. b. increased quality of public and private services. c. dramatic increases in municipal budget burdens for education, health care, and police and fire protection. d. the increased productivity in the services area.
Which of the following operate under a fixed-rate unified currency system?
a. the 12 countries of the European Monetary Union b. the 50 states of the United States c. Hong Kong, Panama, and the United States d. all of the above