Which of the following would be expected to decrease the demand for money in the U.S.?
A. The economy enters a boom period.
B. Grocery stores begin to accept credit cards in payment.
C. Political instability increases dramatically in developing nations.
D. Households fear increasing computer glitches will severely limit their ability to use ATMs.
Answer: B
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If an economy is operating on its production possibilities curve, it is:
A) efficient and fully employed. B) fully employed but not necessarily efficient. C) efficiently producing but not necessarily fully employed. D) inevitably going to grow in the future.
If the real interest rate in the domestic loanable funds market increases,
a. firms will have an added incentive to undertake investment projects. b. households will save less. c. the net inflow of foreign capital will tend to increase. d. it will be cheaper to purchase goods and services now rather than in the future.