Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
a. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
b. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded.
c. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
d. As the interest rate rises, the demand for money curve shifts outward to the right.
a
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The demand curve in the figure above illustrates the demand for a product with
A) zero price elasticity of demand at all prices. B) infinite price elasticity of demand. C) unit price elasticity of demand at all prices. D) a price elasticity of demand that is different at all prices.
Basil is maximizing his utility from consuming tea and crumpets. If the marginal utility of the last crumpet was 32 units of utility and the prices of tea and crumpets are $4 and $8, respectively, what was the marginal utility of the last cup of tea Basil consumed?
a. 2 units of utility b. 12 units of utility c. $6 d. 128 units of utility e. 16 units of utility
GDP underestimates our economic well-being:
a. for of all the following reasons. b. because it includes the value of work done by nannies. c. because it ignores leisure. d. because it includes the value of work done by householders. e. because it includes the value of work done by illegal immigrants.
Milk is considered a commodity because it is which of the following?
(A) The same product regardless of who sells it. (B) An agricultural product. (C) An inexpensive product. (D) A product that can be bought in many different ways.