The decline in the transaction demand for money in the mid- and late 1970s
A) was accompanied by a fall in velocity.
B) was predicted by most economists.
C) may be partly explained by the development of money-market funds and other financial innovations.
D) was the result of the Federal Reserve's easy-money policy.
C
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Which of the following is not a monetary policy tool for shifting the aggregate demand curve?
A. Open-market operations. B. Government spending. C. The discount rate. D. The reserve requirement
In constructing a demand curve for product X:
A. consumer preferences are allowed to vary. B. the prices of other goods are assumed constant. C. money incomes are allowed to vary. D. the supply curve of product X is assumed constant.
Use the following information to answer the question below. It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. Based on the preceding information, which of the following policies would be most appropriate for dealing with this problem?
A. Levy a tax on the producers of electricity and use the tax revenues to clean up the river. B. Levy a tax on the consumers of paper products and use the tax revenues to conduct research on new energy sources. C. Levy a tax on the consumers of electricity and use the tax revenues to subsidize the consumers of paper products. D. Levy a tax on the producers of paper products and use the tax revenues to clean up the river.
What is a primary determinant of the asset demand for money? I. the interest rate II. the opportunity cost of holding money III. the supply of money
A) I only B) III only C) both I and II D) both II and III