If you hold money in anticipation of household emergencies and you give up long-term interest-bearing accounts, you are exercising the
a. speculative motive for holding money
b. transactions motive for holding money
c. opportunity cost motive for holding money
d. precautionary motive for holding money
e. regressive cost of holding money
D
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The cross-price elasticity of demand for coffee and coffee-cream is likely to be
A) greater than zero. B) less than zero. C) zero. D) infinity.
Suppose an expansionary monetary policy reduces nominal interest rates. If this is the case, it follows that the expansionary monetary policy must have:
A. increased expected inflation. B. reduced expected inflation. C. increased expected inflation less than it reduced real interest rates. D. reduced real interest rates less than it increased expected inflation.
As a percentage of GDP, imports are greater than exports for which of the following countries?
A) Germany B) Italy C) the Netherlands D) the United States
In the summer of 2009, the United States federal minimum wage was raised to $7.25. According to theory, what will likely be the result of an increase in minimum wage?
A. All workers prior to the wage increase will now earn at least the minimum wage. B. Some workers will leave the labor market. C. Unemployment will increase as firms lay off workers. D. Firms will hire more workers.