Higher interest rates ____ the ____ cost of holding currency and therefore reduce the quantity of currency demanded.
A. decrease; opportunity
B. increase; transaction
C. decrease; transaction
D. increase; opportunity
D. increase; opportunity
You might also like to view...
Potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in economic growth. Also, during this time ________ occurred because ________
A) inflation; aggregate demand decreased by more than potential GDP B) stagflation; aggregate demand increased by more than potential GDP C) deflation; aggregate demand increased by more than potential GDP D) inflation; aggregate demand increased by more than potential GDP E) inflation; aggregate demand increased by less than potential GDP
The consumption function shows the relationship between
A) interest rates and planned real consumption. B) employment and planned real consumption. C) the price level and planned real consumption. D) real disposable income and planned real consumption.
If a bank gets a $100,000 new deposit, chooses to lend out $75,000, and increases its excess reserves by $5,000 at the same time, then the reserve requirement is: a. 30%
b. 25%. c. 20%. d. unable to be determined from the information given.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.