A person is preparing for a long automobile trip and cashes in a certificate of deposit for cash in case of emergencies along the way. This is an example of the
A. precautionary demand for money.
B. wealth demand for money.
C. asset demand for money.
D. transactions demand for money.
Answer: A
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Consumers in a country buy only two goods, sneakers and manicures. The prices and quantities purchased by urban households are in the table above. The reference base year is 2011. For these data, the CPI for 2012 is
A) 145. B) 110. C) 100. D) 10. E) 160.
If you have trouble finding a job because of a slowdown in the overall economy, we would say that you are
A) cyclically unemployed. B) frictionally unemployed. C) seasonally unemployed. D) structurally unemployed.
Some economists and policymakers criticized the Fed for taking too much time understanding and identifying the problems in financial markets which led to the financial crisis of 2007-2009
This criticism best describes the ________ as a limitation of monetary policy. A) implementation lag B) recognition lag C) impact lag D) asymmetry lag
Suppose an oil refinery and a paper mill both pollute a river. Under a system of marketable pollution permits, which of the following must be true in order for both companies to benefit from trading the right to pollute?
A. They must be able to reduce pollution at exactly the same cost. B. It must cost the firms different amounts to reduce pollution. C. They must have a social conscience and must be devoted to pollution abatement. D. The government must direct them toward beneficial trades.