What factors can cause the portfolio demand for money to increase?
What will be an ideal response?
The portfolio demand for money arises because money is an asset which can be substituted with other assets in a portfolio. There are five factors that affect the portfolio demand for money; an increase would occur due to (1) an increase in wealth; (2) a lower return on alternative assets; (3) higher expected future interest rates; (4) rising risk of alternative assets; and (5) a decrease in the liquidity of alternative assets.
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When productivity growth has been rapid and then slows, the natural rate of unemployment is likely to ________
A) decrease B) be unaffected C) increase D) vary unpredictably
A person who previously had a full-time job has been paroled from prison and has applied for a job is considered
A) a reentrant. B) a job loser. C) a new entrant. D) not in the labor force.