In deciding how much money to hold, individuals
A) must understand the velocity of the money and its role in the economy.
B) compare the inflation rate with the market interest rate.
C) base their decisions on what others are doing.
D) evaluate the relative costs and benefits of holding money versus other assets.
Ans: D) evaluate the relative costs and benefits of holding money versus other assets.
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The figure above shows the market for fast food restaurant employees in a college town in a small nation to the East. The local Taco Bell pays its workers $12 an hour. This wage rate is
A) designed reduce the unemployment rate. B) an effort to increase the demand for labor. C) illegal because the equilibrium wage rate is $6 an hour. D) an efficiency wage aimed at reducing employee turnover. E) the actual equilibrium wage rate.
What are the benefits of fair and efficient relationships with transactional customers?
a. Customers are more forgiving of the occasional service failure b. Good relations lead to repeat business c. Transactional customers may become strategic partners d. Increase complaints and damage reputation e. All of the above f. Only A, B, and C
Does the term "mandatory spending" mean that spending must go on forever?
A) Yes, Congress has no right to change these spending programs. B) Yes, the laws which authorized this spending cannot be changed. C) No, once appropriated, spending is for the life of the program only or until it changes. D) Yes, once appropriated, spending is indefinite.
The average tax rate measures the
a. fraction of spending paid in taxes. b. fraction of income paid in taxes. c. incremental rate of tax on income. d. average deadweight loss from all taxes.