What are the advantages of bank deposits compared to other types of assets?
What will be an ideal response?
Compared to cash, bank deposits offer safety against theft and may also pay interest. Compared with financial assets such as Treasury bills, bank deposits are more liquid. Deposits against which checks can be written offer a convenient way to make payments.
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If the price of a good falls and expenditure on the good rises, the demand for the good is _______
A. elastic B. perfectly elastic C. inelastic D. unit elastic
If technological change is "labor augmenting," then
A) output per worker declines, output per unit of capital increases. B) "effective labor input" increases, output per unit of capital declines. C) output per worker increases, output per unit of capital is constant. D) Both output per worker and output per unit of capital change.
Suppose the price of rice increases and you view rice as an inferior good. The substitution effect results in a ________ change in rice consumption, and the income effect leads to a ________ change in rice consumption
A) positive, positive B) positive, negative C) negative, positive D) negative, negative
One of the reasons that price elasticities of demand are always stated as positive numbers is because:
a. the numerators and denominators of the formula are both negative. b. the numerators and denominators of the formula are both positive. c. price increases always lead to increases in quantity demanded. d. price decreases always lead to decreases in quantity demanded. e. price elasticities are always negative, so we ignore the sign.