Suppose the Fed announces that it expects interest rates to fall in the next quarter. What happens to the demand for money today?
A) The precautionary demand for money goes up.
B) The speculative demand for money goes up.
C) The transaction demand for money goes down.
D) The speculative demand for money goes down.
Ans: D) The speculative demand for money goes down.
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A business produces 4,00 . units per month which he sells at $20/unit. Costs include: $10,00 . on raw materials, $15,00 . on operators and $10,00 . on sales people. In order to break even the fixed costs will have to be:
a. $35,000 b. $40,000 c. $45,000 d. $50,000
Which of the following was not a lesson from the 2007–2009 financial crisis?
A. Financial regulations were too “light” prior to the crisis. B. Excessive complexity made the financial system more fragile and dangerous. C. Both monetary policy and fiscal policy are needed in order for the economy to recover. D. Regulatory failures were based primarily on poor job performance.