The equilibrium exchange rate between two currencies is determined by the supply and demand in the
A. traded goods markets
B. stock exchange markets
C. money markets
D. foreign exchange markets
Answer: D
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Assume that the Cambridge k = .20. If income is equal to $100,000, the transactions demand for money is equal to
A) $20,000. B) $50,000. C) $100,000. D) $500,000.
That the money form should be homogeneous is another way of saying that all units of money should be
a. durable b. portable c. stable d. identical e. divisible
Which of the following statements is always true when inflation occurs?
a. The international competitive position of the country is negatively affected. b. The domestic money loses purchasing power. c. None of the above is true. d. All of the above are always true. e. Lenders benefit and borrowers suffer.
To qualify as "money," a virtual currency does not have to be:
a. A unit of account. b. A store of value. c. A medium of exchange. d. Legal tender. e. To qualify as money, a virtual currency must be all of the above.