The opportunity cost of holding money
a. decreases when the interest rate decreases, so people desire to hold more of it.
b. decreases when the interest rate decreases, so people desire to hold less of it.
c. increases when the interest rate decreases, so people desire to hold more of it.
d. increases when the interest rate decreases, so people desire to hold less of it.
a
You might also like to view...
What is meant by the term "rate of interest"? If the nominal rate of interest in an economy is 6%, and the rate of inflation in the economy is 4%, what is the real rate of interest in the economy?
What will be an ideal response?
Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks will Belize consume?
A) 150 B) 270 C) 930 D) 1,200
The Federal Reserve System was established by Congress in 1914
a. as a result of a breakthrough in economic theory. b. against significant opposition from the banking sector. c. because of the need for a central bank. d. as the world's first central bank.
What does internalizing an externality refer to?
a) making certain government does not disrupt the internal workings of the market b) making buyers pay the full price for the products they purchase c) making certain that all market transaction benefits go to only buyers and sellers d) making buyers and sellers take into account the external effects of their actions