Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
a. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
b. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded.
c. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
d. As the interest rate rises, the demand for money curve shifts outward to the right.
a
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An example of foreign direct investment is the
A) domestic acquisition of less than 10 percent of a foreign company. B) foreign purchase of more than 10 percent of stock in a domestic company. C) purchase of livestock from abroad. D) sale of insurance in a foreign nation.
In a Bertrand model, graphically, the intersection of all firms' best-response curves determines
A) the Nash equilibrium prices. B) the dominant strategy for each firm. C) the degree of product differentiation. D) the price of the market leader.