If I am worried about the price of assets such as bonds falling, I may be more inclined to hold money instead. You hold cash for the:
A. precautionary motive.
B. speculative motive.
C. transactions motive.
D. impulsive motive.
Answer: B
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The supply curve for a perfectly competitive firm is the portion of its marginal cost curve that lies above the average variable cost curve
Indicate whether the statement is true or false
Adam Smith used a famous example of what type of firm to illustrate economies of scale?
a. Apple b. a pin factory c. a lumber mill d. a British university
Most economists agree that a large federal budget deficit has what type of effect on the economy?
If a firm in monopolistic competition lowers its price, what will happen to the quantity of products it sells?
a. The quantity of products sold will increase and sales revenue will fall. b. The quantity of products sold will decrease because this is not perfect competition. c. The quantity of products sold will increase slightly—and in some cases not at all. d. The quantity of products sold and sales revenues will increase as the firm lures customers from its competitors and attracts new customers.