All other factors equal, if the costs of converting bonds and other financial securities to a means of payment decrease:
A. nominal interest rates should decrease.
B. the transactions demand for money should increase.
C. it shouldn't impact the transactions demand for money.
D. the transactions demand for money should decrease.
Answer: D
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The lower left-hand corner of a graph where the two axes meet is called the graph’s origin.
Answer the following statement true (T) or false (F)
Suppose Louisa starts to use Facebook in order to connect with her school friends. She connects with some, but not all of them are on Facebook. If all her friends start using Facebook, it would lead to _____
a. a network externality b. allocative efficiency c. a socially optimum equilibrium d. a negative externality
The earnings test reduces the amount of Social Security payments a retiree can collect unless she or he is under 60.
Answer the following statement true (T) or false (F)
Externalities can be positive or negative. An example of a positive externality is the third-party benefits from solar energy production such as reduced emissions, cleaner air, and the "warm glow" some people experience from engaging in sustainable activities. An example of a negative externality is the emissions produced from driving gasoline powered motor vehicles such. These emissions have been shown to adversely effect the environment, agriculture, and human productivity, morbidity, and mortality. Which of the following policies would NOT incentivize consumers or producers to internalize external costs of the activities they engage in?
a. Driving subsidies to automobile drivers. b. Production subsidies to manufacturers of solar energy equipment such as photovoltaic cells and batteries. c. Driving taxes to automobile drivers. d. Consumption subsidies to buyers of solar energy equipment such as photovoltaic cells and batteries. e. None of the above.