The transactions demand for money exists because households
A) do not like the fact that money is a liquid asset.
B) must save for unexpected emergencies.
C) are insensitive to interest rate changes.
D) do not receive their incomes at the same time they wish to make purchases.
D
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In order to increase economic growth, a government can
A) discourage research and development. B) decrease funding on education. C) discourage specialization and trade. D) establish property rights and a legal system. E) tax saving in order to encourage more spending.
Which of the following calculates the cost of purchasing a specific bundle of goods and services in each country and uses this measure to convert the incomes of different countries to a common currency so they may be more accurately compared?
a. the consumer price parity (CPP) method b. the purchasing power parity (PPP) method c. the GDP deflator exchange (GDPDE) method d. the inflation conversion factor (ICF) method