In the market for money, the price is called the
A. exchange rate.
B. wage rate.
C. same as any other market, simply a "Price."
D. interest rate.
Answer: D
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To support the argument for an active role for government in stabilizing the economy, it must be true that
A) consumers are not rational and that not all wages and prices are flexible. B) not all wages and prices are flexible and that government must be able to react quickly enough. C) government must be able to react quickly enough and that shocks to the economy be primarily due to aggregate supply shocks. D) shocks to the economy be primarily due to aggregate supply shocks and that consumers are not rational.
The Coase theorem states that when permits are non-tradable, the outcome will be optimal, regardless of who initially gets the permits
a. True b. False Indicate whether the statement is true or false
The study of why an economy's production capacity increases over time is the subject of growth economics.
Answer the following statement true (T) or false (F)
Calculate the equilibrium interest rate.
Consider the closed economy of country A where KI = 0. In year 2009, government expenditure (G) is $300 billion, the total tax collected (T) is $900 billion and tax being transferred (TR) is $200 billion. The loanable fund market is currently in equilibrium, and the total demand equation (including SG) is DLF: r =0.04 - 0.000025Q, where r is the real interest rate, and that private saving, SP, equals $800 billion at equilibrium