The quantity of money held in response to interest rates is the
speculative motive for holding money
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A key reason that most people did not anticipate the severity of the recession of 2007-2009 is that
A) they thought the Fed would reduce the target for the federal funds rate to a lower level. B) they did not believe that the federal government would actually bail out large financial institutions. C) they failed to see the financial crisis coming. D) they were more worried about rising inflation than about falling real GDP.
The utility maximizing consumption bundle for an individual can be found by locating _____
a. the individual's bliss point b. any point on an indifference curve touching the budget constraint c. the highest point on an individual's indifference curve d. the point tangent to an individual's budget constraint
Suppose an economy has 90,000 employed persons and 10,000 unemployed persons, the unemployment rate is
a. 11.1% b. 10.0% c. 5.6% d. 12.5% e. 9.1%
Because the CPI is based on a fixed basket of goods, the introduction of new goods and services in the economy causes the CPI to overestimate the cost of living. This is so because
a. new goods and services are always of higher quality than existing goods and services. b. new goods and services cost less than existing goods and services. c. new goods and services cost more than existing goods and services. d. when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.