Holding money as a medium of exchange to purchase goods and services and make payments is known as the
A) spending demand for money.
B) transactions demand for money.
C) precautionary demand for money.
D) asset demand for money.
B
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The price of iPhones has fallen dramatically. Which of the following is likely to happen?
A) The quantity of iPhones supplied will increase. B) The supply of iPhones will increase. C) The quantity of iPhones supplied will decrease. D) The supply of iPhones will decrease.
In the early 1990s, before pay at the pump was an option, a gas station decides to force people to pre-pay due to drive-offs. The opportunity cost of this decision may include:
A. the value of the gas that is no longer stolen by people who drove off. B. not having to look outside for people waving at you to turn on the pump. C. lost revenue when people under estimate what they think their gas tanks will hold in order to avoid going back into the store to get change from overpayment. D. a loss of snack sales because people decide to come into the store to pay for gas before pumping versus after pumping their gas.
Appendix: An optimal incentives contract can induce the revelation of true costs in a partnership by
a. imposing penalties when costs are overstated b. offering bonus payments when costs are verified c. renewing the reliance relationship d. linking revealed cost to the partner's foregone expected profits e. enlisting third-party enforcement
Current calculations make it clear that for the vast majority of young workers, the rate of return on Social Security taxes and benefits will be
A. roughly equal to what would have been generated in private stock-market investments. B. greater than what would have been generated in private stock-market investments. C. lower than what would have been generated in private stock-market investments. D. taxed more heavily than what would have been generated in private stock-market investments.