Other things constant, if the interest rate rises, people prefer to hold:
a. less money because the opportunity cost of holding money has increased
b. more money because the opportunity cost of holding money has increased.
c. less money because the opportunity cost of holding money has declined.
d. more money because the opportunity cost of holding money has declined.
e. the same amount of money because the opportunity cost of holding money is zero.
a
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For this question, assume that policy makers are pursuing a fixed exchange rate regime and that output is initially less than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?
A) an increase in the price level B) a devaluation of the currency C) an increase in the domestic interest rate D) a reduction in the foreign price level E) none of the above
A monopolist can earn an economic profit only when:
a. marginal cost equals marginal revenue. b. marginal cost equals price. c. average total cost is less than price. d. all of these.