Inflation

When considering the demand for money curve, the interest rate

A) is the price of holding money. B) varies negatively with the transactions demand for money. C) will have a positive relationship with the quantity of money demanded. D) is independent of the opportunity cost of money.

A bumper-to-bumper warranty on a used car is a signaling device that

A) identifies a high-quality car as a high-quality car, because putting such a warranty on a low-quality car would be prohibitively costly. B) disguises a low-quality car as a high-quality car, and thus makes it easier to sell. C) is necessary in order to sell a low-quality car at all. Without it no one would risk buying the car. D) isn't necessary if there is a mix of high-quality and low-quality cars in the market. E) helps sellers determine whether the buyer is truly looking for a high-quality car.