John gets paid monthly and pays for everything with cash. When he cashes his check he keeps $200 for food, $100 for utilities, $900 for rent, $50 for transportation, $100 for entertainment and $300 for unexpected expenditures
Which of the following statements is TRUE?
A) The transactions demand for money is $1,350, the precautionary demand is $300 and the asset demand is $0.
B) The transactions demand for money is $350, the precautionary demand is $1,150 and the asset demand is $150.
C) The transactions demand for money is $350, the precautionary demand is $950 and the asset demand is $0.
D) The transactions demand for money is $450, the precautionary demand is $300 and the asset demand is $900.
A
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The short-run Phillips curve shifted during the 1970s primarily because of
A) the two large oil price shocks. B) the changing demographics of the population. C) tight monetary policy. D) easy fiscal policy.
Which of the following is true of a price level increase in an economy?
a. When the price level increases, the purchasing power of money increases b. When the price level increases, the purchasing power of money decreases. c. When the price level increases, the purchasing power of money remains unchanged. d. When the price level increases, the purchasing power of money either increases or decreases, depending upon the size of the national debt. e. When the price level increases, the purchasing power of money either increases or decreases, depending upon the level of government expenditures.