Liquidity is:
A. the magnitude of change in the money supply as controlled by the Fed.
B. a measure of how easily a particular asset can be converted quickly to cash without much loss of value.
C. the speed with which physical dollars change hands in the economy.
D. the speed with which dollars are spent in the economy.
Answer: B
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A firm uses labor and capital. To tell if the firm is technologically efficient, you
A) do not need to know the cost of labor or the cost of capital. B) need to know the cost of capital but not the cost of labor. C) need to know the cost of labor and the cost of capital. D) need to know the cost of labor but not the cost of capital.
Based on this graph, during the 1940s and the Recession of 2008–2009, the national debt ______.
a. remained below 10 percent of GDP
b. was temporarily paid off
c. was at the same level
d. exceeded 100 percent of GDP
Because ________ in the government budget deficit increase the real interest rate, budget deficits can ________ firm investment
A) increases; increase B) decreases; increase C) decreases; decrease D) increases; decrease
As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.