Which of the following varies directly with the interest rate?
A. the opportunity cost of holding money
B. the asset demand for money
C. the level of investment
D. the transactions demand for money
Answer: A
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What is the primary difference between the substitution and the income effect of a price change?
A) The substitution effect holds income constant and the income effect holds utility constant. B) The substitution effect is always positive and the income effect is always negative. C) The substitution effect holds utility constant and the income effect holds prices constant. D) The substitution effect is always negative and the income effect is always positive.
An American worker who becomes unemployed typically receives 100% of her former salary during the first six months she is unemployed
a. True b. False Indicate whether the statement is true or false
If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then
a. Iowa has a comparative advantage in the production of corn. b. Iowa has an absolute advantage in the production of corn. c. Iowa should import corn from Oklahoma. d. Oklahoma should produce just enough corn to satisfy its own residents' demands.
In the circular flow diagram, when Brian provides labor through the markets for factors of production to ABC Company, the flow of money he receives in exchange is called