The quantity of money held in response to interest rates is the:
a. transactions motive for holding money.
b. precautionary motive for holding money.
c. speculative motive for holding money.
d. unit-of-account motive for holding money.
c
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Consider the benefit and cost of Mr. T's Coffee Shop, which are indicated by the following: B(Q) = 50 + 18Q – 2Q2 and C(Q) = 40 + 6Q. Use this information to answer the following questions.
a. What is the marginal benefit, represented by MB(Q)? b. What is the marginal cost, represented by MC(Q)? c. At what level of output is the net benefit maximized?
The PPP theory is most useful in predicting:
A. short-run changes in the exchange rate for a country that mainly produces lightly-traded standardized goods. B. short-run changes in the exchange rate for a country that mainly produces heavily-traded standardized goods. C. long-run changes in the exchange rate for a country that mainly produces heavily-traded standardized goods. D. long-run changes in the exchange rate for a country that mainly produces lightly-traded non-standardized goods.
In a television advertisement for AFLAC supplemental health insurance, an ice skater says to his skating partner, "Do you want to try a triple jump?" She responds, "Why not, I have AFLAC." This response illustrates the:
A. principal-agent problem. B. adverse selection problem. C. moral hazard problem. D. free-rider problem.
Which statement concerning the kinked demand curve model of oligopoly is false?
A. It addresses the question of price "stickiness." B. It assumes when one oligopoly raises the price, all others will follow. C. The portion of the demand curve above the "kink" is more elastic than the portion below. D. The firm's marginal costs can sometimes shift without changing the profit-maximizing price and output.