Financial innovations can have the effect of
A) only decreasing the demand for money.
B) only increasing the demand for money.
C) either increasing or decreasing the demand for money depending on what the innovation is.
D) increasing the Fed's monetary policy.
C
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If you earn and spend $300 per week and maintain an average cash balance of $100 per week, your velocity of money is
A) $100. B) $200. C) 3. D) 2.
Refer to Figure 15-11. What is the size of the deadweight loss prior to Verizon entering the market and what happens to this deadweight loss after Verizon does enter the market?
A) The deadweight loss of area C+D is converted to consumer surplus B) The total deadweight loss is the area D+F; D is converted to consumer surplus and F to producer surplus. C) The deadweight loss of area D is converted to consumer surplus. D) The deadweight loss of area D is converted to producer surplus.